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Discover practical last-minute tax planning hacks to reduce your tax liability before the financial year ends. Learn quick, effective strategies to maximize deductions, claim eligible exemptions, and make smarter tax-saving decisions.
Last updated on: Jul 07, 2026
Taxpayers are often advised to start early with their tax planning. The key to tax saving lies in understanding the right investment strategies for an individual and identifying where deductions can be claimed. Furthermore, it is imperative for taxpayers to adopt a long‑term, structured approach towards taxes and invest in tax‑saving instruments during the early part of a financial year. This makes it easier to align tax‑saving investments with broader financial goals.
Taxpayers may compare the Old Tax Regime and the New Tax Regime based on their individual financial situation, as deductions and exemptions are generally available under the Old Tax Regime, while the New Tax Regime features lower tax rates with limited deductions.
However, people often have limited time for tax planning, which may result in relying on unverified sources or paying more tax than required. Below are year‑end tax‑planning options (subject to eligibility and the selected tax regime) that can help in making effective last‑minute decisions.
The differences between the two tax regimes can be understood through the following comparison:
| Particulars | Old Tax Regime | New Tax Regime |
|---|---|---|
Tax Slab Rates |
Higher slab rates |
Lower slab rates |
Section 80C (₹1.5 Lakhs) |
Available |
Not available |
ELSS, PPF, NSC |
Eligible for deductions |
Not eligible |
NPS (80CCD(1B) – ₹50,000) |
Available |
Not available (except employer contribution under specified limits) |
Home Loan Principal (80C) |
Available |
Not available |
Home Loan Interest (Section 24) |
Available (up to ₹2 Lakhs for self‑occupied property) |
Not available |
Education Loan Interest (80E) |
Available |
Not available |
Health Insurance (80D) |
Available |
Not available |
HRA / LTA / Other Allowances |
Available |
Not available |
Standard Deduction (Salaried) |
Applicable |
Applicable (as notified) |
Ideal for |
Taxpayers with significant investments and deductions |
Taxpayers preferring simplicity and lower compliance |
Section 80C of the Income Tax Act allows individuals to claim deductions of up to ₹1.5 Lakhs on certain eligible investments and expenses. These deductions are applicable under the Old Tax Regime, subject to prescribed conditions.
The eligible investment and payment options include the following:
Equity Linked Savings Scheme (ELSS) is a diversified equity mutual fund whose investments qualify for tax deductions. As per SEBI norms, a minimum of 65% of the corpus is invested in equity‑oriented instruments, and returns depend on market performance. Investments in ELSS are eligible for deduction under Section 80C, up to a limit of ₹1.5 Lakhs. A three-year lock-in period applies to ELSS investments, and performance is based on equity market conditions.
The Public Provident Fund is a government‑backed savings scheme offering stable, fixed returns (interest rate subject to quarterly revision). Investments in PPF qualify for tax deduction under Section 80C. The maximum annual contribution allowed is ₹1.5 Lakhs, and the entire amount deposited during a financial year can be claimed as a deduction.
Individuals contributing to the National Pension System (NPS) may be eligible to claim an additional deduction of up to ₹50,000 under Section 80CCD(1B), which is separate from the ₹1.5 Lakhs limit specified under Section 80C. The NPS is a retirement-focused scheme where funds are invested across asset classes such as equity, corporate bonds, and government securities, with returns linked to market performance.
This additional deduction is available only under the Old Tax Regime, while employer contributions are allowed under specified limits in both regimes.
Investments in the National Savings Certificate scheme are eligible for tax deduction under Section 80C. Although the interest earned is taxable, the accrued interest is treated as reinvested and qualifies for deduction every year except the year of maturity.
Tax deductions and exemptions related to insurance and medical expenses are governed by Section 80C, Section 80D, Section 80DD, and Section 10(10D) of the Income Tax Act.
Premiums paid towards life insurance policies (for self, spouse, children or HUF members) are eligible for deduction under Section 80C, subject to policy conditions and premium limits relative to the sum assured. In addition, maturity proceeds and death benefits are generally exempt from tax under Section 10(10D), subject to prescribed conditions.
Health insurance premiums paid qualify for deductions under Section 80D:
₹25,000 for self/spouse/children
Additional ₹25,000 for parents below 60 years
₹50,000 for senior citizen parents
The maximum deduction available under this section can go up to ₹1,00,000.
Note: These deductions are available only if the taxpayer opts for the Old Tax Regime.
Home loan and education loan repayments may qualify for tax deductions under relevant sections of the Income Tax Act.
Additionally, tuition fees paid for up to two children are deductible under Section 80C within the overall ₹1.5 Lakhs limit.
Note: These benefits are generally not available under the New Tax Regime unless specifically notified.
Tax planning involves understanding the provisions available under the Income Tax Act and how they apply to different types of income and financial activities. Deductions related to investments, insurance, loans, and other eligible expenses are subject to specified conditions and may vary depending on the applicable tax regime.
The Old and New Tax Regimes differ in structure, particularly in terms of tax rates, deductions, and exemptions. The applicability of these provisions depends on individual financial details and prevailing tax rules.
Reviewer
Tax benefits may be available through eligible deductions under sections such as 80C, home loan interest, health insurance premiums or HRA, depending on the tax regime selected. Salaried taxpayers may also be eligible for a standard deduction as applicable.
Eligible investments or payments made before the end of the financial year may still qualify for deductions, subject to regime selection and compliance requirements.
Smart tax planning involves choosing the appropriate tax regime, aligning investments with financial goals, and utilising eligible deductions and exemptions in a timely and compliant manner.
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