Tax Saving Investment Plan

Tax Saving Investment Plan

As we enter the 2025–26 financial year, tax planning remains a vital part of financial health. With the New Tax Regime now serving as the default choice, featuring higher rebate limits and revised slabs—taxpayers must carefully decide between the simplicity of the new system and the deep deduction benefits of the Old Tax Regime.

Best Tax-Saving Investment Options for FY 2025–26

Choosing the right tax-saving investment depends largely on which regime you select. For those staying in the Old Tax Regime, maximizing the ₹1.5 lakh limit under Section 80C is essential.

Income Tax Calculator for FY 2025–26

In FY 2025–26, the New Tax Regime has been sweetened. Salaried individuals now enjoy a Standard Deduction of ₹75,000.

• Effectively Tax-Free Income: Under the New Regime, if your taxable income is up to ₹12 lakh, your tax liability is Nil (due to the ₹60,000 rebate under Section 87A).
• Marginal Relief: If you earn slightly above ₹12.75 lakh (including standard deduction), marginal relief ensures you don't pay more in tax than the extra income you earned.

Tax-Saving Investment Options Explained

Government-Backed Tax-Saving Schemes

These schemes offer the highest level of security as they are backed by the Government of India.

• National Pension System (NPS): Offers an additional ₹50,000 deduction under Section 80CCD(1B) over and above the 80C limit.
• Public Provident Fund (PPF): The "Gold Standard" of tax-free investments in india. Every rupee of interest and maturity is exempt.
• Employees’ Provident Fund (EPF): Mandatory for salaried staff; interest is tax-free up to a contribution of ₹2.5 lakh/year.
• Sukanya Samriddhi Yojana (SSY): The best education plan for daughters offering 8.2% interest and EEE tax status.
• Senior Citizen Savings Scheme (SCSS): Offers 8.2% interest, paid quarterly, with 80C benefits for those above 60.

Other Tax-Saving Investment Options

• Equity-Linked Savings Scheme (ELSS): Also known as tax-saving mutual funds, these have the shortest lock-in period (3 years) and high growth potential.
• Unit Linked Insurance Plan (ULIP): A hybrid of tax saving SIPs and life insurance.
• Health Insurance Plans: Premiums paid for self, family, and parents are eligible for deductions up to ₹75,000 under Section 80D.

Tax-Saving Options Under Old vs New Tax Regime (FY 2025–26)

Crucial Update: Most tax-saving investment options, such as 80C (PPF, ELSS, LIC), 80D (Health Insurance), and Section 24 (Home Loan Interest), are NOT available under the New Tax Regime.

• Choose Old Regime if: You have a home loan, pay high rent (HRA), and maximize 80C and 80D (total deductions > ₹4.25 lakh).
• Choose New Regime if: You want lower tax rates without the hassle of lock-in investments.

How to Plan Investments to Save Income Tax in 2025

• Calculate Your Gross Income: Include salary, interest, and capital gains.
• Evaluate Deductions: Sum up your EPF, Insurance, and Home Loan interest.
• Compare Regimes: Use an income tax calculator to see if the Old Regime's deductions outweigh the New Regime's lower rates.
• Start a Tax Saving SIP: Don't wait until March. Use the best ELSS tax-saver funds via SIPs to average out market risks.

Why Buy a Tax-Saving Plan from Jio Insurance Broking?

Jio Insurance Broking provides a seamless digital experience for comparing the best ELSS tax-saving mutual funds and insurance plans.

• Zero Paperwork: Complete your KYC and investment in under 2 minutes.
• Expert Insights: Get curated lists of the best ELSS tax-saver funds based on 5-year performance.
• Unified Dashboard: Track your tax-saving investment portfolio alongside your insurance policies.