1What is the best way to save income tax in India?
Choose the regime that gives the lower tax, then use 80C (Rs 1,50,000), the Rs 50,000 NPS, HRA, 80D and home-loan interest in the old regime. The regime choice itself is the biggest lever.
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ArticleSaving income tax legally comes down to a handful of well-understood levers — the regime choice and a set of deductions and exemptions. Here's the complete, plain-language guide to how to save income tax in India.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
Choose the right regime, use 80C, NPS, HRA, 80D and home-loan interest, and plan advance tax. Here's the complete guide to saving income tax.
Your first and biggest decision is the regime. The new regime gives a Rs 75,000 standard deduction and nil tax up to Rs 12,00,000 with few deductions; the old regime taxes more but rewards deductions. If your deductions are large, the old regime can win; if not, the new regime usually does — compare both each year.
In the old regime, 80C is the backbone — EPF, PPF, ELSS, life insurance, children's tuition and home-loan principal, up to Rs 1,50,000. For most salaried people, filling this limit is the single largest deduction available.
The Rs 50,000 NPS deduction under 80CCD(1B) sits over and above 80C, and the employer's NPS contribution under 80CCD(2) is deductible too — the latter even in the new regime. NPS is the main way to claim beyond the Rs 1,50,000 limit.
If you rent, claim HRA (the least of actual HRA, rent minus 10% of salary, or 50%/40% of salary). Claim health insurance under 80D (Rs 25,000, plus up to Rs 50,000 for senior parents). And claim home-loan interest up to Rs 2,00,000 under Section 24(b). These are old-regime levers that add up quickly.
If you have income beyond salary, pay advance tax in the four instalments where your tax exceeds Rs 10,000, to avoid 234B/234C interest. Reconcile your income against your AIS and file on time — accurate filing protects your deductions and avoids notices.
Choose the regime that gives the lower tax, then use 80C (Rs 1,50,000), the Rs 50,000 NPS, HRA, 80D and home-loan interest in the old regime. The regime choice itself is the biggest lever.
Through NPS — the Rs 50,000 under 80CCD(1B) on top of 80C, plus the employer contribution under 80CCD(2) , which is deductible even in the new regime. Health insurance and home-loan interest add more.
Yes, but less — the Rs 75,000 standard deduction, the 87A rebate up to Rs 12 lakh, and employer NPS work , while 80C, HRA and most deductions need the old regime.
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