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The financial year 2025–26 is underway. Whether you’re a salaried professional, a business owner, or a retiree, it’s critical to be aware of key tax provisions that can impact your savings, deductions, and compliance.
Understanding these five essential sections of the Income Tax Act makes the filing of your income tax return (ITR) difficult.
1. Section 80C: India’s Most Popular Tax-Saving Tool
Section 80C allows individuals and Hindu Undivided Families (HUFs) to claim deductions up to ₹1.5 lakh annually on various financial investments and expenses, including:
- Public Provident Fund (PPF)
- Employees’ Provident Fund (EPF)
- Equity-Linked Saving Schemes (ELSS)
- 5-year Tax-Saving Fixed Deposits
- Sukanya Samriddhi Yojana
- Life insurance premiums
- Tuition fees for children
- Principal repayment of home loans
2. Section 24(b): Home Loan Interest Deduction
If you’re a home loan borrower, this section permits you to deduct up to ₹2 lakh annually on interest paid toward loans for self-occupied properties. For rented-out properties, you can claim the entire interest amount, but the loss set-off against other income is limited to ₹2 lakh.
- Construction must be completed within 5 years from the end of the financial year in which the loan was taken.
- Unused losses can be carried forward for 8 years.
3. Section 80D: Health Insurance Premium Deduction
Stay covered—and save taxes. Section 80D offers:
- ₹25,000 deduction for insurance premiums for self, spouse, and children
- ₹50,000 extra for senior citizen parents
- Total deduction: up to ₹75,000 (₹1 lakh if both taxpayer and parents are 60+)
- Includes ₹5,000 for preventive health check-ups
Family medical coverage = tax savings. Choose your policy wisely.
4. Section 10(14): House Rent Allowance (HRA) Exemption
If you’re a salaried employee living in rented accommodation, this provision can help reduce taxable income. The exemption is calculated as the least of:
- Actual HRA received
- 50% of salary (metro cities) or 40% (non-metros)
- Rent paid minus 10% of salary
To claim: Submit rent receipts and landlord’s PAN (if rent > ₹1 lakh/year).
5. Section 234F: Penalty for Late Filing of ITR
Missing the ITR deadline can cost you:
- ₹1,000 penalty for income below ₹5 lakh
- ₹5,000 for income above ₹5 lakh
Late filing may also result in:
- Loss of refunds
- Ineligibility to carry forward capital losses
- Additional interest under Sections 234A and 234B
Avoid last-minute stress—file early.
Summary Table: Provisions at a Glance
| Section | Purpose | Max Deduction / Penalty |
|---|---|---|
| 80C | Tax-saving investments | ₹1.5 lakh |
| 24(b) | Home loan interest | ₹2 lakh (self-occupied) |
| 80D | Health insurance | ₹25k–₹1 lakh (based on age) |
| 10(14) | HRA exemption | Variable (based on rent and salary) |
| 234F | Late filing penalty | ₹1,000–₹5,000 |
Taxpayer Takeaways
- Start planning now—waiting until March may limit your savings.
- File ITR before the due date to avoid penalties and protect deductions.
- Use professional advice to tailor these sections to your personal finances.
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