Every salaried employee in India wants to reduce their tax burden legally. With the right financial planning, you can save a significant amount of tax each year while also building wealth for the future. In this article, we’ll discuss the top income tax saving tips for salaried employees in 2026 to help you plan smartly and save more.
1. Utilize Section 80C Deductions
Under Section 80C of the Income Tax Act, you can claim deductions up to ₹1.5 lakh annually. You can invest in:
- Public Provident Fund (PPF)
- Employees’ Provident Fund (EPF)
- ELSS Mutual Funds
- National Savings Certificate (NSC)
- Life Insurance Premiums
These options not only save tax but also help you build a secure financial future.
2. Claim HRA (House Rent Allowance) Exemption
If you live in a rented house, you can claim HRA exemption. The amount depends on your salary, rent paid, and city of residence. This deduction can significantly reduce your taxable income if properly calculated.
3. Save Tax on Health Insurance (Section 80D)
Under Section 80D, you can claim deductions up to ₹25,000 for health insurance premiums (₹50,000 for senior citizens). Always insure yourself and your family — it’s a smart way to protect your health and your wallet.
4. Claim Tax Benefits on Education Loan (Section 80E)
If you are paying an education loan for yourself, your spouse, or your children, the interest paid is fully deductible under Section 80E — no upper limit on the amount.
5. Invest in NPS (National Pension System)
Investing in the National Pension System (NPS) gives you an additional ₹50,000 deduction under Section 80CCD(1B). It’s a great way to save tax and build a retirement corpus.
6. Home Loan Interest Deduction (Section 24B)
If you’ve taken a home loan, you can claim up to ₹2 lakh per year on interest paid under Section 24B. This is one of the biggest tax-saving benefits for homeowners.
7. Opt for the Right Tax Regime
The government now offers two tax regimes — old and new. The old regime offers multiple exemptions and deductions, while the new one has lower tax rates but no exemptions. Compare both and choose the one that saves you the most.
Final Thoughts
Tax saving is not just about claiming deductions; it’s about planning smartly to achieve your financial goals. Start early, invest regularly, and review your tax plan every year to make the most of available benefits.