Strategic Tax Planning under the Old Tax Regime
Taxpayers opting for the Old Tax Regime can significantly reduce their taxable income by structuring their investments and expenditures across statutory deduction sections.
1. Section 80C: Up to ₹1,50,000
- Eligible Instruments: Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS mutual funds with 3-year lock-in), Life Insurance premium, National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), 5-year tax-saving FDs, and principal repayment of home loan.
2. Section 80D: Health Insurance (Up to ₹1,00,000)
- Self, spouse, and dependent children: Up to ₹25,000 (₹50,000 if senior citizen).
- Parents: Additional ₹25,000 (₹50,000 if parents are senior citizens 60+).
- Includes up to ₹5,000 for preventive health check-up.
3. Section 80CCD(1B): National Pension System (NPS)
An exclusive additional deduction of ₹50,000 over and above the ₹1.5 Lakh 80C limit for voluntary contributions to Tier-1 NPS accounts.
4. Section 24(b): Home Loan Interest
Deduction up to ₹2,00,000 per year on interest paid for a self-occupied residential house property.