Year-end planning
In this chapter: Tax-saving instruments under 80C, 80D, 80CCD(1B) · Old vs new regime — the household calculation
Year-end tax planning aims to minimise tax legitimately by maximising deductions and exemptions. 80C (₹1.5L cap): ELSS, PPF, EPF, life insurance premium, home-loan principal, tuition fees. 80D: health insurance, preventive checkup. 80CCD(1B): NPS Tier I (₹50K extra above 80C). Old vs New regime decision: depends on total deductions taken.
Old regime stack: Standard deduction (₹50K), 80C (₹1.5L), 80D (up to ₹1L for self+parents), 80CCD(1B) NPS (₹50K), HRA (variable), home-loan interest (₹2L for self-occupied), 80E education loan (uncapped interest), 80G donations (50-100%). Total deductions can reach ₹4-5L for HRA-eligible. New regime: Standard deduction ₹75K (post-Budget 2024), enhanced rebate up to ₹7L income (zero tax post-rebate), 80CCD(2) employer NPS still allowed. Decision: if deductions exceed ~₹3.75L, Old wins; otherwise New. Verify on income-tax department's comparison utility before filing.
Practitioner techniques: (1) Front-load 80C in April-June rather than rushing in March — equity ELSS bought in April benefits from a full year of compounding before sale. (2) Split 80D across self and parents — better coverage and higher deduction. (3) Maximise 80CCD(1B) NPS — extra ₹50K saves up to ₹15K tax for 30% bracket; this is one of the highest tax-yields per rupee. (4) Use HRA + home-loan combination if eligible — if you live in rented place in city A and own a let-out place in city B, claim both. (5) Donate to 100%-deductible Section 80G charities (specified by government) for full deduction; 50% for general charities.