ITR Filing 2025: Tax Deductions You Might Be Missing and Smart Investments to Save More

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by

Himanshu
in

With the Income Tax Return (ITR) filing season for FY 2024-25 (AY 2025-26) underway, many taxpayers end up paying more tax than they should because they miss out on eligible deductions. By planning ahead and investing in the right instruments, you can reduce your tax liability significantly. This article explains the most important deductions, investments, and tips to make the most of the 2025 tax season.

Understanding the Basics

Before filing your ITR, it’s crucial to know the key dates, regimes, and documents required.

ItemDetails
Filing Deadline (Non-Audit Cases)15 September 2025
Tax Regimes AvailableOld Tax Regime (with deductions) or New Tax Regime (lower slab rates, fewer deductions)
Documents RequiredInvestment proofs, premium receipts, rent receipts, policy/account numbers, Form 16, TDS certificates, bank interest certificates

Five High-Impact Deductions and Investments You Should Not Miss

#Instrument / DeductionWhat It IsDeduction Limit & ConditionsPros & Cons
1ELSS (Equity Linked Savings Scheme)Equity mutual funds with tax savings under Section 80C. Lock-in of 3 years.Part of the overall ₹1.5 lakh limit under Section 80C.Pros: Potential for higher returns, shortest lock-in under 80C. Cons: Market risk.
2PPF (Public Provident Fund)Government-backed savings scheme with tax-free interest.Up to ₹1.5 lakh under Section 80C, 15-year lock-in.Pros: Safe, stable returns, tax-free. Cons: Long lock-in, less liquidity.
3NPS (National Pension System)Retirement-oriented plan mixing equity and debt.Additional deduction of ₹50,000 under Section 80CCD(1B) over and above 80C.Pros: Extra deduction, good retirement corpus. Cons: Lock-in until retirement.
4Tax-Saving Fixed Deposits & NSCBank FDs with ~5-year lock-in and other traditional 80C instruments.Under Section 80C, up to ₹1.5 lakh. Interest is taxable.Pros: Low risk, guaranteed returns. Cons: Lower returns, less flexibility.
5Health Insurance Premiums (Section 80D)Deduction for premiums paid for self, family, parents.Up to ₹25,000 (self/family <60); additional for parents; higher for senior citizens.Pros: Tax benefit plus medical protection. Cons: Need valid premium receipts.

Additional Deductions Often Overlooked

  • Interest on Savings Accounts (80TTA/80TTB): Deduction on interest from savings accounts.
  • HRA (House Rent Allowance): Ensure rent receipts and landlord details are submitted to claim exemption.
  • Education Loan Interest (80E): Deduction on interest for education loans.
  • Donations (80G): Deduction for specified charitable donations; documentation required.

Old vs New Tax Regime: Which One Works for You?

  • Old Regime: Best for those who have made significant tax-saving investments and want to claim deductions.
  • New Regime: Lower tax slab rates but no or limited deductions. Simpler if you have minimal investments.

Run a quick comparison to decide which regime yields lower tax liability for your income profile.

Tips to Maximise Tax Benefits

  1. Start investing early in the financial year to avoid last-minute rush.
  2. Plan your deductions under Sections 80C, 80D, etc. to stay within limits.
  3. Keep receipts and documents organised.
  4. Understand lock-in periods and liquidity of your chosen investments.
  5. Re-evaluate your tax regime choice every year.

Common Mistakes to Avoid

  • Forgetting to report exempt income such as PPF interest or gratuity in the ITR.
  • Not including account or policy numbers required in new ITR forms.
  • Assuming the old regime is always better without calculating benefits under the new regime.

Frequently Asked Questions (FAQs)

Q1. When is the ITR filing deadline for FY 2024-25 (AY 2025-26)?
The deadline for non-audit cases is 15 September 2025.

Q2. Can I claim both 80C and the additional NPS deduction?
Yes, you can claim up to ₹1.5 lakh under 80C and an additional ₹50,000 under Section 80CCD(1B) for NPS.

Q3. Is PPF interest taxable?
No, PPF interest is completely tax-free.

Q4. Do I need to show details for donations?
Yes, you must have valid receipts and institution details to claim under Section 80G.

Q5. Which tax regime saves more?
It depends on your income and deductions. Compare both regimes each year.

Conclusion

By making the right investments and claiming all eligible deductions, you can significantly reduce your tax burden for FY 2024-25. Keep your documents in order, choose your tax regime wisely, and don’t leave any benefits on the table. With timely planning, your tax filing process becomes smoother and more rewarding.