As the income tax return filing season for FY26 begins, salaried taxpayers are looking to optimise their tax liability by making use of eligible deductions and exemptions under both the old and new tax regimes. The ITR Filing 2026 cycle allows individuals to reduce taxable income through structured investments, insurance payments and housing-related benefits. Choosing the right regime and correctly reporting salary components has become increasingly important for effective tax planning.

One of the most commonly used provisions remains Section 80C, which allows deductions of up to Rs 1.5 lakh in a financial year. This includes investments in instruments such as Equity Linked Savings Schemes, Public Provident Fund and tax-saving fixed deposits. Additionally, contributions to the National Pension System (NPS) qualify under Section 80CCD, while an extra deduction of up to Rs 50,000 is available under Section 80CCD(1B), offering further retirement-linked tax relief.

Health insurance continues to play a key role in reducing tax burden under Section 80D. Individuals below 60 years of age can claim deductions of up to Rs 25,000 on premiums paid, while senior citizens are eligible for up to Rs 50,000. These benefits extend to premiums paid for self, spouse, children and parents, making medical insurance a significant component of tax-saving planning for salaried individuals.

Also Read: Bengaluru Woman's Rs 43,000 Monthly Budget Goes Viral — And The Internet Has Questions

Home loan borrowers also receive substantial relief through deductions on interest payments under Section 24(b). Self-occupied property owners can claim up to Rs 2 lakh annually on interest paid. First-time homebuyers may further benefit from an additional deduction of up to Rs 1.5 lakh under Section 80EEA, while principal repayment remains eligible under Section 80C, enhancing overall housing-related tax advantages.

Beyond investments and loans, taxpayers can also claim deductions under Section 80G for donations made to approved charitable organisations. The old tax regime further allows a standard deduction of Rs 50,000 and House Rent Allowance (HRA) exemptions based on salary structure and rent paid. These exemptions collectively help salaried employees significantly lower their taxable income when properly utilised.

However, under the new tax regime, the scope of deductions remains limited compared to the old regime. While benefits such as employer NPS contributions, standard deduction of Rs 75,000, and select home loan interest deductions for let-out properties are available, most exemptions are not permitted. As a result, taxpayers must carefully evaluate both regimes before filing returns to choose the most beneficial option.

Also Read: Nifty Shows Bullish Reversal Pattern, 23,280 Level Remains Key For Market Direction