The Curious Case of the Disappearing Salary (and How to Save It)
Tax planning can feel overwhelming for salaried employees, especially when deductions start eating into their hard-earned income. With the choice between the old and new tax regimes, understanding where and how to save becomes critical. From Section 80C investments and health insurance benefits under 80D to claiming HRA, NPS contributions, and home loan interest, there are multiple legal avenues to reduce tax liability. This guide simplifies key deductions and exemptions available in FY 2024–25, helping you make informed decisions and maximize savings. Whether you’re new to tax planning or seeking smarter strategies, here’s what every salaried person should know.
Client: Bhaiya! Save me! I just saw my Form 16… and I think the Income Tax Department wants my kidney this year.
CA: Relax. The taxman doesn’t want your kidney. Just your soul. But don’t worry—“Jab tak todega nahi, tab tak chhodega nahi.”
Client: That’s not reassuring! I’m a salaried guy. Fixed income. EMI, mutual fund, rent… and then this tax deduction. Why am I paying so much?
CA: Welcome to adulthood. And yes—“Dukh mein yaad aata hai Chartered Accountant.” But luckily for you, you’ve come to the right one.
Client: Cut to the chase, boss. How can I legally save tax in FY 2024–25?
CA: First things first: Are you opting for the old regime or the new regime?
Client: There’s a choice? Why didn’t anyone tell me?
CA: That’s because no one reads emails from the Income Tax Department. Anyway:
- New Regime (Section 115BAC): Lower tax slabs, but no deductions (except NPS employer contribution, standard deduction, and 80CCD(2), etc.)
- Old Regime: Higher slabs, but full buffet of deductions and exemptions.
Client: I want to save tax. Give me the buffet.
CA: Old regime it is. Let’s begin.
1. Section 80C – The King of Deductions (Limit: ₹1.5 lakh)
CA: “Keh diya na, bas keh diya.” If you don’t use 80C, you’re leaving money on the table.
Popular Options:
- EPF/PPF
- Life Insurance Premium
- ELSS Mutual Funds
- Principal repayment of housing loan
- Children’s tuition fees
- 5-year tax-saving FD
Client: So basically, I invest ₹1.5 lakh and get deduction?
CA: Exactly. 80C is like the Virat Kohli of tax-saving—reliable, aggressive, and delivers under pressure.
2. Section 80D – Health Insurance (Deduction: ₹25,000 to ₹1,00,000)
CA: Buy health insurance for yourself and your parents. Premiums paid are deductible.
- Self + family: ₹25,000
- Parents < 60: ₹25,000 | > 60: ₹50,000
Client: My dad watches Ramayana and eats 5 almonds daily. He’s fine.
CA: Even Bhagavad Gita says—“Karmanye vadhikaraste, ma phaleshou kadachana.” (You do your duty, don’t worry about the outcome). Buy the insurance.
3. Section 80CCD(1B) – NPS Additional Deduction (₹50,000)
CA: Invest in the National Pension System. On top of 80C, you get extra ₹50,000.
Client: But retirement is 30 years away!
CA: Still, tax saved today is like a pizza slice eaten secretly—it always tastes better.
4. House Rent Allowance (HRA)
CA: If you live on rent, claim HRA. Keep rent receipts and landlord’s PAN if rent > ₹1 lakh/year.
Client: But I live with my parents…
CA: Even better. Pay rent to them. Show it officially. It’s legal. Just make sure they declare it in their ITR.
Client: Wow. So now even my dad can become my landlord? The Gita never mentioned this twist.
5. Standard Deduction – ₹50,000
CA: No questions asked. Every salaried person gets ₹50,000. It’s like the *“Baba Ramdev yoga of tax”—*free and useful.
6. Home Loan Interest – Section 24(b)
CA: If you have a home loan, claim up to ₹2 lakh interest deduction.
Client: I do! And I cry every time I pay the EMI.
CA: Then this should bring tears of joy.
7. Work-from-Home Benefits (Unofficial)
CA: Your company might reimburse internet, electricity, or furniture under allowances. Ask your HR. If they deny, quote DDLJ: “Bade bade deshon mein aisi chhoti chhoti baatein hoti rehti hain.”
8. Section 80E – Education Loan Interest
CA: If you’re repaying education loan (for self, spouse, kids), the interest is fully deductible for 8 years.
Client: Education loan bhi, tax deduction bhi? Ye toh two birds, one deduction.
9. Donations – Section 80G
CA: Donate to PM CARES, NGOs, or religious institutions. Keep receipts. Some give 100% deduction, some 50%.
Client: I once donated to a baba on Instagram…
CA: I said registered NGOs, not WhatsApp gurus.
10. Other Sections
- 80TTB for senior citizens (interest on deposits)
- 80U for disability
- LTA – Leave Travel Allowance (block years)
- Interest on Savings (80TTA) – up to ₹10,000
Client: Boss! I feel like I just leveled up in life. Why didn’t anyone teach me this in school?
CA: Because school taught you mitochondria is the powerhouse of the cell—not that the taxman is the powerhouse of your salary.
Client: One last question—how do I decide between new and old tax regimes?
CA: Use the online calculator or consult your CA (which is me). But remember—“Life is all about deductions and decisions.”
Client: You’re not just a CA, you’re a philosopher.
CA: I’m a CA. We’re born with stress and blessed with Excel.
Client (walking out): I came in broke. I leave with hope.
CA: And remember—“In this world nothing can be said to be certain, except death and taxes.”
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Thanks for the information