As taxpayers strive to optimize their financial plans and minimize their tax burdens, staying informed about the latest changes in Income Tax Return (ITR) regulations becomes crucial. With recent updates, here are five simple yet effective tips to help you save on your income taxes:

Utilize Section 80C Deductions:

Take full advantage of deductions available under Section 80C of the Income Tax Act. Investments in schemes such as Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), National Savings Certificate (NSC), and Employee Provident Fund (EPF), National Pension System (NPS), Unit-Linked Insurance Plans (ULIPs), etc. qualify for tax benefits. A taxpayer can take a maximum deduction benefit of Rs 1.5 lakh under Section 80C.

Explore Health Insurance Benefits:

Invest in a comprehensive health insurance policy for yourself and your family. Premiums paid towards health insurance plans are eligible for deductions under Section 80D. The maximum cumulative deduction limit under Section 80D is Rs 75,000 (though, the cumulative amount may vary based on the age of the policyholder). One can claim deduction of Rs 25,000 for self, spouse and children under Section 80D. Deduction limit for parents above the age of 60 is allowed up to Rs 50,000 under Section 80D.

Also read: ITR Filing 2024: Absence of THIS document could lead to denial of HRA claim

Maximize Home Loan Benefits:

If you have taken a home loan, capitalize on the tax benefits associated with it. Under Section 24(b), interest payments on home loans are eligible for deductions, with recent changes allowing for a deduction of up to Rs 2 lakh on interest paid for a self-occupied property. Additionally, deductions worth Rs 1.5 lakh (including registration and stamp duty) on principal repayment provide further tax relief. However, you can avail this 80C benefit for home loan principal repayment only when you have not exhausted the limit.

Leverage HRA Exemptions:

If you are a salaried individual receiving House Rent Allowance (HRA), ensure you claim exemptions as per the latest regulations. Even if your landlord does not provide PAN details, recent changes allow taxpayers to submit alternative documentation, such as rent receipts and rental agreements, to support their HRA claims. Without landlord’s PAN, you can claim an exemption of Rs 1 lakh per annum on house rent allowance. If you provide PAN of your landlord, you can claim higher deductions.

Invest in NPS for Retirement Planning:

Consider investing in the National Pension System (NPS) to secure your financial future while enjoying tax benefits. Contributions to NPS qualify for deductions under Section 80CCD(1), with an additional deduction of up to Rs 50,000 available under Section 80CCD(1B). The recent increase in the tax exemption limit for employer contributions to NPS to 14% of salary ensures enhanced tax savings.

If we add all these five deductions and exemptions taking into account the maximum limit allowed under respective sections of the income tax laws, the taxable income of an individual comes down by at least Rs 5.75 lakh.

By implementing these five simple tips in accordance with the latest changes in ITR regulations, taxpayers can effectively reduce their tax liabilities and achieve greater financial stability, according to All India ITR, a tax return filing service provider .