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Tax Planning 5 min read

7 Legal Ways to Reduce Your Income Tax This Year

Smart, compliant strategies that help individuals and professionals keep more of what they earn.

Paying tax is a civic duty, but overpaying is optional. With proactive planning, you can legally reduce your tax liability and keep more of your hard-earned income. Here are seven proven, fully compliant strategies.

1. Maximise Section 80C deductions

Contributions to PPF, EPF, tax-saving fixed deposits, children's tuition fees and principal repayment on a home loan qualify for deductions up to ₹1.5 lakh under Section 80C. Plan these contributions early in the year rather than rushing in March.

2. Claim health insurance under 80D

Premiums paid for health insurance for yourself, your family and your parents are deductible under Section 80D. Senior citizen parents unlock a higher limit, making this one of the most efficient deductions available.

3. Use the NPS additional deduction

Beyond 80C, an extra deduction of up to ₹50,000 is available for contributions to the National Pension System under Section 80CCD(1B).

4. Structure your salary efficiently

Allowances such as HRA, LTA and reimbursements can reduce taxable income when structured correctly. Salaried professionals should review their CTC components each year.

5. Choose the right tax regime

Compare the old and new tax regimes annually. The best choice depends on the deductions you actually claim — there is no one-size-fits-all answer.

6. Offset capital gains

Harvest losses to offset gains, and time your asset sales to benefit from long-term capital gains rates where possible.

7. Plan, don't react

The biggest savings come from year-round planning, not a March scramble. Speak to our advisors early and we'll build a tax strategy tailored to your situation.

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