Introduction: Why Look for tax saving beyond 80c 2025-26?
New generation opportunity, Tax Saving beyond 80c 2025-26: While 80C investments like PPF and ELSS are popular, overlooking other deductions means leaving money on the table. With the new tax regime’s higher standard deduction (₹75,000) and revised slabs, strategic use of Sections 80D, 80CCD(1B), and 24(b) can triple your savings.
The ₹2.5L Tax-Saving Blueprint
Most taxpayers stop at Section 80C’s ₹1.5L limit, unaware they can double their savings using other sections. Consider this: A ₹50K NPS investment (80CCD(1B)) + ₹75K health insurance (80D) + ₹2L home loan interest (24(b)) = ₹3.25L deductions without touching 80C. Here’s how to build a layered tax-saving portfolio.
Table of Contents for Tax Saving beyond 80c 2025-26
1. National Pension System (NPS): The Retirement Tax Shield
How it works: NPS offers a three-tier deduction structure:
- Self-contribution: ₹1.5L under 80C + ₹50K extra under 80CCD(1B)
- Employer contribution: Up to 14% of salary (Basic + DA) tax-free under 80CCD(2)
Enhanced Example: Meet Ravi, a 35-year-old with ₹12L annual income:
| Component | Amount | Section |
|---|---|---|
| Self NPS Tier-I | ₹50,000 | 80CCD(1B) |
| Employer NPS (14% of ₹10L basic) | ₹1,40,000 | 80CCD(2) |
| Total tax-free | ₹1,90,000 | (Exclusive of 80C) |
FY 2025-26 Perk: Partial withdrawals (25% corpus) now allowed for critical illnesses
Know more about the National Pension Scheme (NPS).
2. Health Insurance (Section 80D): Family Protection = Tax Savings
Tax saving beyond 80c 2025-26 Breakdown of limits:
| Coverage | Deduction | Max Saving (30% slab) |
|---|---|---|
| Self + Family (age <60) | ₹25,000 | ₹7,500 |
| Senior Citizen Parents | ₹50,000 | ₹15,000 |
| Preventive Checkups | ₹5,000 (included above) | – |
Pro Strategy:
- Buy a super top-up plan (e.g., ₹10L base + ₹25L top-up). Premiums qualify for 80D while expanding coverage affordably.
- Real case: A 40-year-old paying ₹30K for parents’ insurance + ₹20K for self saves ₹15,600 tax (assuming 30% slab).
Health Insurance Tax Benefits: Dedication Under Section 80D
3. Home Loan Interest (Section 24(b)): Your Property Pays Taxes
Dual benefits:
- Self-occupied: ₹2L interest deduction under 24(b) + ₹50K extra under 80EE (first-time buyers).
- Rented property: No upper limit on interest deduction against rental income
Case Study: Priya buys a ₹45L home in Mumbai (2025):
- Loan: ₹35L @8.5% | Year 1 interest: ₹2.97L
- Tax saved: ₹2L (24(b)) + ₹50K (80EE) = ₹75,000 (30% slab)
- Bonus: Principal repayment qualifies for 80C (₹1.5L cap)
Home Loan Interest (Section 24(b)):Know more from CBDT official website
4. Donations (Section 80G): Give Smart, Save Smart
Maximize impact:
- 100% deduction for PMNRF, National Defence Fund (no cap).
- 50% deduction for registered NGOs (up to 10% of adjusted gross income)
Golden rule: Always donate via UPI/cheque—cash donations >₹2,000 are disallowed.
Know more about Dedication concerning donations to specific funds, charitable institutions, etc.
5. Education Loan (Section 80E): Invest in Knowledge
Key features:
- 100% interest deduction (no principal) for 8 years
- Covers loans for higher education in India/abroad (self, spouse, children)
- Example: ₹10L loan @9% = ₹90K annual interest → Saves ₹27K tax (30% slab)
Tax Benefit Under Section 80e: Deduction regarding interest on loan taken for higher education.
6. Agniveer Corpus Fund (Section 80CCH): New-Age Savings
Military personnel under the Agnipath Scheme can claim:
- Employee + employer contributions as deductions.
- Tax-free withdrawals under specified conditions.
Also read the new tax Benefits for Agniveers under the Agnipath Scheme: Section 80CCH.
7. Leave Encashment & Gratuity: Untapped Opportunities
Tax-free thresholds:
- Leave encashment: ₹25L (private employees) / Fully exempt (govt employees)
- Gratuity: ₹20L (or 15 days salary/year of service)
Advanced FAQ on Tax saving beyond 80C 2025-26
1. How can salaried employees optimize both regimes?
New regime (default): Ideal if income <₹12L (zero tax after ₹75K standard deduction)
Old regime: Better for those with >₹5L deductions (e.g., home loan + NPS + insurance).
2. What if I miss the March 31 deadline?
Some options remain open:
- Health insurance (can buy till March 31)
- NPS (Tier-I contributions accepted till fiscal year-end)
3. Are there deductions for electric vehicle loans?
Yes! Section 80EEB offers ₹1.5L interest deduction on EV loans (separate from 24(b))
Advanced Implementation FAQ
1. How should a freelancer earning ₹18L prioritize investments?
Tax saving beyond 80C 2025-26 Recommended Sequence:
- NPS Tier-I (₹50K under 80CCD(1B))
- Health insurance (₹75K under 80D)
- ELSS (₹1.5L under 80C)
- Donations (₹1L under 80G)
- Total Savings: ₹3.75L deductions → ₹1.12L tax saved
2. What’s the smartest way to combine a home loan and NPS?
Power Combo:
- Use NPS savings to prepay home loan after 5 years
- Example: Withdraw 25% NPS corpus (tax-free) to reduce principal
- Result: Lower interest + continued 80C benefits
3. Can I revise my tax regime choice later?
Yes! Salaried individuals can switch regimes annually, while businesses must stay consistent. Evaluate each year based on:
- Planned investments
- Major life events (home purchase, medical needs)
Conclusion: Tax saving beyond 80c 2025-26
Build Your Tax-Saving Pyramid
Priority checklist for Tax saving beyond 80C 2025-26
- Maximize NPS (₹50K extra + employer contribution)
- Secure health coverage (₹75K family + parents)
- Leverage home loan benefits (₹2.5L total savings)
- Plan donations strategically (80G)
“The best time to plant a tax-saving tree was last year. The second-best time is today.” Start now!
Note: Tax laws are subject to change. Verify thresholds with a CA. Returns are illustrative; actual savings depend on the income slab. Last updated: May 2025.
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