Tax Saving Tips: Last chance to save tax! Complete these important tasks before 31st March..

Taxpayers have two options for filing income tax returns, New Tax Regime and Old Tax Regime. The New Tax Regime has been set as the default regime from 2023-24. However, the New Tax Regime does not provide the benefit of many exemptions and deductions, which are available in the Old Tax Regime. Despite this, out of the ITRs filed for the financial year 2023-24, about 74% of the taxpayers opted for the New Tax Regime.

At the same time, more taxpayers can opt for the New Tax Regime in the future, due to the new tax slab introduced by Finance Minister Nirmala Sitharaman in Budget 2025 and tax-free income up to Rs 12 lakh.

Know this thing before choosing the option of a new tax regime.

If you are planning to choose the new tax regime instead of the old tax regime this time, then let us tell you that if you have invested to save tax in the financial year 2024-25, then you will not be able to take advantage of it in the new tax regime.

For example, if you opt for the new tax regime to file ITR, then you will not be able to claim many tax benefits and deductions including HRA, LTA, 80C, and 80D. If you had bought a life insurance policy to take advantage of the deduction under 80C, then you will not get this benefit in the new tax regime.

Benefits will be available under the old tax regime.

If you have not yet made a tax-saving investment for the current financial year 2024-25, or have to do a little more, then you still have time, you have to complete this work before 31 March. Under Section 80C of the Income Tax Act, you can save tax on investments up to Rs 1.5 lakh, and remember, this benefit will be available only to taxpayers who choose the old tax regime.

The benefit of tax deduction on children's fees too

As told to you, under Section 80C of Income Tax (Income Tax Deduction Under Section 80C), you can claim tax deduction on investments up to a maximum of Rs 1.5 lakh. In this, you can also save tax on the expenditure made on life insurance policy and school fees or tuition fees for up to two children.

For example, suppose you have two children and you are spending Rs 1 lakh every year on their school fees or tuition fees, then you can claim a tax deduction on this expenditure. That is, if you are thinking of investing only to save tax (Tax Saving 2025), then first you should find out whether there is a need to invest more or not. That means the life insurance policy and children's school or tuition fees may be enough that you do not need to make any separate investments.

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