Hey friends!
We all know about the usual tax-saving tricks like investing in LIC, PPF, or ELSS under section 80C. But today, I want to share some underrated tax-saving ideas that most people don’t even know about — or they simply ignore!
These are real, legal, and smart ways to save money on taxes in India. Let’s dive in!
Tax-Saving Hacks
If you are looking for smart ways to protect as much of your hard-earned money as possible, this blog is a must-read! It covers a variety of tax-saving methods—some well-known, some you may have never heard of—that are practical and easy to implement.
Whether you are a salaried professional, a freelancer, or a small business owner, you will find valuable information here that will help you legally reduce your tax burden, plan better, and make the most of your financial year.
1. Pay Rent to Your Parents (Legally!)
Under the Income Tax Act 1961, individuals can claim House Rent Allowance (HRA) exemption for rent paid to their parents, provided certain conditions are met. These include the existence of a genuine rental agreement, verifiable proof of rent payment, confirmation that the parents are the rightful owners of the property, and that the rent amount is in line with current market rates.
If you’re staying with your parents and they own the house, you can actually claim HRA (House Rent Allowance) by paying them rent — but there’s a catch!
What to do:
- Sign a rent agreement with your parents.
- Transfer the rent through bank or UPI – no cash.
- Your parents must show this income in their ITR.
This is a win-win! You save tax, and if your parents are in a lower tax slab or retired, it balances out.
2. Get Tax-Free Allowances from Employer
Instead of just salary, ask your HR to structure your salary with tax-free components. You can get exemptions on:
- Food coupons or Sodexo (up to ₹50 per meal)
- Telephone/internet bills
- Books and education allowance
- Conveyance or travel reimbursement
Pro tip: These need supporting bills, so start collecting them!
3. Use NPS – And Get Extra ₹50,000 Deduction
Section 80CCD(1B) of the Income Tax Act provides an additional deduction of up to ₹50,000 for contributions made to the National Pension System (NPS). The deduction will be available to an individual only if he or she opts out of the new tax regime under section 115BAC(1A).
Most people only use ₹1.5 lakh under 80C. But if you invest in the National Pension Scheme (NPS), you can claim an additional ₹50,000 deduction under 80CCD(1B). That’s extra tax saving over and above 80C. It’s great for long-term wealth too.
4. Health Check-Up Can Save Tax Too
Health insurance is one of the most effective ways to reduce the financial burden that can come with unexpected medical emergencies. It allows individuals to receive reimbursement for eligible medical expenses through their insurance provider.
Additionally, under Section 80D of the Income Tax Act, taxpayers can claim these reimbursed expenses as a deduction, up to the prescribed maximum limit, which helps in lowering their overall tax liability. Under section 80D.
Even if you don’t have insurance, this ₹5,000 is still claimable.
So go for that full body check-up — it’s good for health and wealth!
5. Tuition Fees for Kids = Tax Benefit
Under Section 80C of the Income Tax Act, you can get a tax deduction on the tuition fees paid for your two children. This benefit also applies if your children are studying abroad, provided the foreign school or college is recognized by the Government of India.
If you’re paying tuition fees for your kids’ school, you can claim that amount (up to ₹1.5 lakh) under section 80C.
Only for maximum 2 children, and only tuition part (not transport, uniform, etc.).
While applying for these deductions, it is important to have proper documentation and proof to substantiate the claim.
6. Claim Home Loan Interest Even Before Moving In
Buying a house? You can still claim home loan interest paid during construction phase.
For under-construction properties, you cannot claim any tax deduction on the interest paid on your home loan until construction is complete. However, the interest you pay during this construction period does not go to waste – you can claim it later. After construction is complete, you are allowed to claim this pre-construction interest in five equal installments, starting from the year construction ends.
Here’s the hack:
- Pre-construction interest can be claimed in 5 equal installments starting from the year you get possession.
Many miss this and lose thousands in tax saving!
7. Open a Sukanya Samriddhi Account for Your Daughter
If you are in the old regime, SSY is one of the most tax-efficient options due to its EEE status. Under the new regime, though you lose the deduction, the interest and maturity amount remain tax-free, which is still a solid benefit for long-term, girl-child-focused savings.
If you have a girl child under 10, this is one of the best tax-saving + future investment options.
- Interest is tax-free
- Invested amount is tax-deductible under 80C
- Great for her higher education or marriage
A beautiful blend of savings + purpose.
8. Buy an Electric Vehicle (EV)
If you’re thinking about buying an electric vehicle (EV), here’s something that might just make the decision easier: under Section 80EEB of the Income Tax Act, you can actually get a tax break on the interest you pay for your EV loan.
Yep, if you finance your EV through a loan, the interest you pay—up to ₹1.5 lakh per year—is eligible for a tax deduction. It’s a pretty solid incentive that not only helps you save money but also supports the shift towards cleaner, greener transportation. So, you’re not just making an eco-conscious choice—you’re getting rewarded for it too.
Final Words – Don’t Just Save, Plan Smart
Most people rush at the end of the financial year and just dump money into LIC or random policies. But with these lesser-known tax-saving ideas, you can plan better, save more, and invest wisely.
What’s your favourite tax-saving trick? Or did you learn something new today? Let me know in the comments!
And hey – share this post with someone who always complains about taxes .