Tax Deductions in India for FY 2025-26: Save More with 80C, 80D, 80G – Including ELSS, Home Loan, Insurance & More!

Introduction

Thoughtful tax planning is about more than simply reducing what you pay to the government. It sets you up for better financial health, ensures protection for your loved ones, and allows you to contribute to larger causes. As FY 2025-26 approaches, Indian taxpayers have access to substantial deductions under the Income Tax Act—most notably Sections 80C (investments and savings), 80D (health insurance), and 80G (charity). The right balance of these, coupled with timely action, helps employees, professionals, and retirees cut their tax outgo while meeting personal and societal goals.

Section 80C: Investing for Growth and Security

Paragraph: Section 80C remains the cornerstone for tax-saving strategies under the Old Tax Regime, allowing a deduction of up to Rs.1.5 lakh per year. Its broad scope covers investment, insurance, repayment of home loans, and even school tuition fees. By thoughtfully combining safe and growth-oriented options, taxpayers can both maximize returns and minimize risk.

Key 80C instruments and payments:

• ELSS (Equity Linked Saving Scheme) – 3-year lock-in, higher market returns.
• PPF (Public Provident Fund) – 15-year tenure, government guarantee, tax-free interest.
• EPF (Employee Provident Fund) – Payroll-driven retirement savings.
• 5-year Tax Saver Fixed Deposits (FDs) – Bank-backed, fixed returns.
• NSC (National Savings Certificate) – 5-year term, stable performance.
• Sukanya Samriddhi Yojana – For a girl child, high interest, long-term goal.
• Life Insurance Premium (all approved types).
• Tuition fees for up to 2 children (can be for primary, secondary, or higher education).
• Home loan principal repayment (for self-owned or let-out properties).
• Senior Citizens Savings Scheme (SCSS) – special high-interest for retirees.

Pointers:

• Split between equity (ELSS) and fixed income (PPF/FD/NSC) for optimal results.
• Only amounts deposited/invested before March 31 of the tax year are eligible.
• This section is not available under the New Tax Regime.

Section 80D: Prioritizing Health Protection

Paragraph: Health insurance is a crucial element of tax strategy and personal security. Section 80D offers a two-fold advantage: financial cover during medical emergencies and deduction benefits on health premiums and check-ups. Different limits apply for self, family, and parents, effectively encouraging health planning for multiple generations.

Coverage includes:

• Self, spouse, dependent children: Maximum Rs.25,000 deduction.
• Parents below 60 years: Additional Rs. 25,000.
• Parents aged 60 and above: Increased limit of Rs. 50,000.
• Preventive health check-ups: Up to Rs. 5,000 within above limits.
• Medical expenses for uninsured senior citizens: Up to Rs. 50,000.

Pointers:

• Only payments made via cheque/bank/digital methods qualify.
• Retain all premium receipts and insurance certificates for recordkeeping.
• Multiple policies permitted, aggregate deduction must respect section limits.

Section 80G: Giving Back with Tax Benefits

Paragraph: Charitable giving is rewarded in the tax system if you donate to government-approved funds or organizations. Section 80G deductions vary based on where and how much you contribute—sometimes offering a full deduction, sometimes partial. Only electronic or cheque payments count for major donations.

Types of donations:

• 100% deduction without limit: PM CARES, National Defence Fund, etc.
• 50% deduction without limit: Certain approved charities and trusts.
• Donations subject to 10% of gross total income: Specified cases.

Pointers:

• Ensure the charity is registered under Section 80G and collect receipts with certification.
• Donations over Rs. 2,000 must not be paid in cash to be eligible.
• Confirm deduction percentage on your receipt before claiming.

Other Valuable Deductions

Paragraph: Beyond the “big three,” several other deductions help improve savings and credit for unique life needs—education, retirement, property ownership, and healthcare.

Important sections:

• 80CCD(1B): Extra Rs. 50,000 for NPS (Tier 1).
• 80E: Education loan interest, up to eight years, no cap.
• 80EE / 80EEA: First home loan interest, with additional benefits for affordable housing.
• 80TTA / 80TTB: Savings bank interest, up to Rs.10,000 (80TTA) or Rs. 50,000 (80TTB for seniors).
• 80DD / 80DDB/ 80U: Benefits for dependent care, critical illness, or personal disability.

Pointers:

• Always validate eligible financial institutions and loan types.
• Secure and scan all proofs (certificates, payment receipts, bank statements) to ensure hassle-free filing.

Best Practices and Pitfalls

Paragraph: Tax planning demands discipline and careful recordkeeping. Many taxpayers lose out on key deductions because they invest late or fail to produce documentary proofs at filing time. Equally important is regime selection—note that most deductions vanish under the New Tax Regime except for NPS employer contributions.

Actionable checklist:

• Review regime eligibility and benefits each financial year.
• Maintain a filing calendar to avoid missing deadlines.
• Store receipts and certificates digitally for all claimed deductions.
• If in doubt, consult an expert or use authorized online platforms for compliance.

Conclusion

Strategic and balanced use of Sections 80C, 80D, 80G, and other relevant deductions can transform the way you approach tax planning for FY 2025-26. This guide equips you with the knowledge to combine growth, safety, health, and philanthropy in your savings plan. Whether you’re investing for your family’s future, covering medical risks, or supporting a good cause, the Indian tax system continues to reward those who plan ahead and act with discipline.