Hurry! Grab your last chance today to invest in tax-saving instruments

If you have chosen the old tax regime, ensure that your tax-saving investments under Sections 80C, 80D, 80G, and others are made before March 31 to maximise tax benefits

If you plan to choose the old tax regime while filing your Income Tax Return (ITR) in July for FY 2024-25, keep in mind that today, March 31, is the deadline for investing in tax-saving instruments such as PPF, NSC, KVP, SSY, and SCSS to avail tax benefits under the old tax regime.

 

Tax slabs under the old tax regime:

 

Income up to Rs 250,000: No tax

 

Income from Rs 250,001 to Rs 500,000: 5 per cent

 

Income from Rs 500,001 to Rs 10,00,000: 20 per cent

 

Income above Rs 10,00,000: 30 per cent

 

 

The old tax regime also allows for various deductions.

 

Various tax-saving options that people can explore:

 

Section 80C: This is the basic and primary investment option for tax savings. When one invests across these eligible options, you are eligible for a deduction of Rs 1.5 Lakh (maximum limit, all taken together) from your taxable income. Options are:

 

Public Provident Fund (PPF): They offer a safe, long-term investment with a 15-year lock-in. Alternatively, Equity Linked Savings Scheme (ELSS) mutual funds provide the potential for higher returns, but with a shorter 3-year lock-in.

 

Employee Provident Fund (EPF) is usually a mandatory contribution for salaried employees and a great investment for your retirement security.

 

Life insurance premiums qualify for deduction under 80C, securing your family's future. Another option is Sukanya Samriddhi Yojana, which is a dedicated savings scheme for your girl child.

 

For homeowners on a home loan, repaying the principal of your home loan also falls under Section 80C, offering tax benefits while building your asset.

 

Section 80D: Investing in comprehensive health insurance for yourself, your spouse, children, and parents can help you get a deduction up to Rs 25,000 for individuals below 60, and up to Rs 50,000 for senior citizens. This is not only an effective tax saving tool, but also covers you from unexpected medical expenses.

 

Section 80E: If you have taken an education loan for yourself, your spouse or children, the interest you pay on that loan is fully deductible under Section 80E.

 

Section 80G: Donations to eligible charitable institutions and funds can claim a deduction under Section 80G. The amount deductible depends on the recipient organisation, so one must check the details before donating.

 

Section 80CCD(1B): One can also consider contributing to the National Pension System (NPS). With this, you can claim an additional deduction of up to Rs 50,000 under Section 80CCD(1B). This is over and above the Rs 1.5 lakh limit of Section 80C.

 

If you have made an error in your previous Income Tax Return (ITR) or missed reporting any income, you can still rectify it by filing an updated return (ITR-U). This can be done within two years from the end of the assessment year, with the deadline set for March 31, 2025.