Tax Planning 101 — Section 80C, 80D & HRA Cheat-Sheet (FY 2025-26)

Every March, half the country panics about tax-saving investments. Done right, you can save ₹40,000–₹80,000 on tax legally — and end up with real wealth, not just receipts. Here's the structured cheat-sheet.

Old regime vs new regime — pick first

From FY 2023-24, the new regime is default. Its lower slabs are attractive, but you lose 80C, 80D, HRA, and most other deductions.

Rule of thumb: if your total tax-saving investments + HRA exceed ~₹3.5 lakh, old regime usually wins. Below that, new regime wins. Use any income-tax department calculator to be sure.

Section 80C — ₹1.5 lakh limit

The most generous deduction bucket. Allowed instruments:

• ELSS Mutual Funds — 3-yr lock-in, ~12% expected return, LTCG above ₹1L taxed at 10%. Our top pick for the 80C bucket.
• PPF — 7.1% guaranteed, 15-yr lock-in, fully tax-free. Best for risk-averse.
• EPF — automatic for salaried. Counts towards 80C.
• Life Insurance Premium — only term plans count efficiently. Avoid endowment.
• Tax-Saver FD — 5-yr lock-in. Interest is fully taxable. Avoid unless very risk-averse.
• NSC, Sukanya Samriddhi (girl child), Sr Citizens Savings Scheme — niche use-cases.

Section 80CCD(1B) — Extra ₹50,000 NPS

Over and above the 80C ₹1.5L. NPS contributions up to ₹50,000 are deductible. The catch: 40% must be annuity at age 60. Use it if you're in the 30% slab — that's ₹15,000 tax saved every year.

Section 80D — Health insurance premiums

• Self + spouse + kids: up to ₹25,000
• Parents (below 60): additional ₹25,000
• Parents (60+): additional ₹50,000
• Maximum claim: ₹1,00,000 (own family senior + parents senior)

HRA — Often the biggest deduction

If you live in a rented house, HRA exemption is the lower of:

• Actual HRA received
• 50% of basic salary (40% for non-metro)
• Actual rent paid − 10% of basic

Even if you live with parents, you can pay them rent (in writing, by bank transfer) and claim HRA. Parents declare the rental income in their ITR; if their tax bracket is lower, the family saves net.

Capital gains — the silent tax

Equity (stocks, equity MF)

• Held <12 months: 15% STCG (Section 111A)
• Held ≥12 months: 10% LTCG above ₹1 lakh/year (Section 112A)

Debt (debt MF, bonds)

Post April 2023, debt MF gains are fully taxed at slab rate regardless of holding period. The pre-2023 indexation benefit is gone.

Tax-saving sequence we recommend

1. Max out EPF (employer + employee) — counts towards 80C.
2. Top up 80C with ELSS (₹1L–1.5L). Use a goal SIP calculator to figure out the monthly chunk.
3. Add ₹50K NPS for the extra 80CCD(1B) deduction.
4. Buy adequate health insurance — claim under 80D.
5. Claim HRA correctly (with rent receipts + PAN of landlord if rent > ₹1L/year).
6. Harvest LTCG yearly: redeem equity MF gains up to ₹1L tax-free, reinvest same day.

Every salaried family in the 30% slab can save ₹70,000+ annually with this structure. Want a personalised tax plan? Free with our consultation.