Income Tax Planning Tips For Salaried Individuals Before Filing Returns

In this blog, we will cover the Income Tax Tips Required for those who earn a salary, including popular deductions, discounts, and smart investment options.

Understand the Importance of Tax Planning for Salaried Employees

Tax planning for salaried employees helps ensure that you make the most of all available benefits before the financial year ends. By planning early, you can:

• Reduce taxable income legally
• Maximize savings through deductions and exemptions
• Avoid last-minute rush or errors while filing ITR
• Build a disciplined approach to investments

Claim Standard Deduction on Salary

Every salaried person in India is eligible for a standard deduction salary India benefit of ₹50,000. This is automatically available to you without the need for any proof of expenses. It’s one of the simplest ways to Reduce Your Taxable Income.

Maximize Deductions Under Section 80C

One of the most effective methods of saving tax is through deductions under Section 80C of the Income Tax Act. You can claim up to ₹1.5 lakh per financial year by investing in or spending:

• EPF (Employees’ Provident Fund)
• PPF (Public Provident Fund)
• ELSS (Equity Linked Saving Scheme)
• Life insurance premiums
• National Savings Certificate (NSC)
• Tax-saving Fixed Deposits (FDs)
• Principal repayment of home loan
• Tuition fees for children

Choosing the right mix of these not only helps you save taxes but also builds long-term wealth.

Utilize HRA Exemption for Salaried Individuals

If you live in a rented house, you can claim HRA exemption for salaried employees. The discount amount depends on your basic salary, HRA received, rent payment, and habitat.

Remember:

• Rent receipts are required for claiming HRA.
• If rent paid exceeds ₹1 lakh annually, landlord’s PAN is mandatory.

This benefit is particularly useful for those living in metro cities where rent is high.

Compare and Choose Between The Old VS New Tax Regime

Since the introduction of the new tax regime, salaried individuals now have the option to choose tax regime old vs new each year.

• Old Regime: Higher tax slabs but comes with exemptions and deductions (80C, HRA, 80D, etc.)
• New Regime: Lower tax slabs but with no major deductions allowed

The right choice depends on your salary structure and investment profile. If you claim many deductions, the old regime is often better. If you don’t have many deductions, the new regime may work in your favor.

Claim Medical Insurance Deduction (Section 80D)

Medical expenses can be unexpected, but you can secure yourself and save taxes at the same time. Under Section 80D, you can claim a medical insurance deduction as follows:

• Up to ₹25,000 for the premiums paid for your husband or wife and children
• Additional ₹25,000 for parents (₹50,000 if parents are senior citizens)

This not only saves on tax but also provides financial security in terms of medical emergency conditions.

Explore Investments to Save Income Tax in India

Apart from Section 80C, several other investments are available in India to save income tax:

• NPS (National Pension System): Additional deduction of ₹50,000 under Section 80CCD(1B).
• Home Loan Interest (Section 24): Up to ₹2 lakh deduction for interest paid on housing loan.
• Donations (Section 80G): Claim deductions for donations to eligible institutions.
• Education Loan Interest (Section 80E): Deduction on interest for higher education loans.

These options not only reduce tax liability but also align with long-term financial goals.

How to File ITR Correctly as a Salaried Individual

Knowing how to file ITR correctly salaried individual is as important as saving tax. Common mistakes can lead to notices from the Income Tax Department. Keep these points in mind:

• Collect Form 16 from your employer
• Cross-check TDS details with Form 26AS or AIS
• Report all income, including interest from savings accounts or fixed deposits
• Double-check deductions claimed
• File before the due date to avoid penalties

E-filing portals have made the process easier, but accuracy is key.

Save Tax Before Filing Return – Last-Minute Checklist

Before you file your ITR, here’s a quick save tax before filing return checklist:

• Did you claim standard deduction of ₹50,000?
• Have you maximized your Section 80C investments (₹1.5 lakh)?
• Are you claiming HRA exemption correctly?
• Did you opt for the right tax regime?
• Have you included medical insurance premiums (80D)?
• Have you reviewed your 26AS for all TDS credits?

Completing this checklist ensures you don’t miss out on legitimate tax-saving opportunities.

Final Thoughts

Smart tax planning is not about avoiding taxes, but about paying a necessary amount only and using the rest of your growth and development. For salaried employees, making standard deductions, HRA exemption, Section 80C investments, medical insurance deductions, and correctly selecting governance can create a big difference in home income.

Start early, stay organised, and file your ITR correctly to avoid stress at the last minute. The effective scheme will not only save you money today but also give you peace of mind and financial benefits.

Looking for expert guidance on tax filing near Delhi? At Lex N Tax, our professionals can help you simplify the process and maximise your savings.