12 Best Tax Saving Schemes For Salaried Indians (FY 2025-26)

If you’re a salaried professional in India, tax season can feel like a maze: HR reminders for proofs, confusing old vs new regime choices, and the last‑minute scramble to “invest” just to save tax. You don’t just want to reduce your TDS—you want every rupee to work toward real goals (retirement, emergency cover, a home), without getting locked into products that don’t fit your risk or cash‑flow needs. And with FY 2025–26 rules, limits and exemptions scattered across Sections 80C, 80D, 80CCD(1B), and 24(b), it’s easy to miss savings or overpay.

This guide cuts the noise. We’ve curated the 12 best tax‑saving schemes for salaried Indians for FY 2025–26—ELSS, PPF, NPS, EPF, health and term insurance, tax‑saving FDs, ULIPs (with caveats), SSY, home‑loan deductions, and even 80TTA/80TTB on savings interest. For each, you’ll get: what it is, exact tax benefits and limits (think ₹1.5 lakh under 80C, extra ₹50,000 under 80CCD(1B), up to ₹2 lakh under 24[b], 80D slabs), expected returns, risk and lock‑in, fit under old vs new regime, who should pick it, plus sharp pro tips. We’ll start with Invsify’s smart, SEBI‑registered, conflict‑free plan that builds an optimal, goal‑linked allocation—then move into each instrument so you can choose confidently and submit proofs on time.

1. Invsify smart tax-saving plan (SEBI-registered advisory)

Invsify builds a goal‑linked, conflict‑free tax plan as a SEBI‑registered investment advisor. Instead of pushing products, it allocates across the best tax saving schemes—ELSS, PPF, NPS, EPF, health and term insurance, 5‑year FDs, SSY, and home‑loan deductions—so you hit the legal limits efficiently while matching risk, liquidity and goals.

What it is

A personalized, AI‑assisted framework that:

Maps your payroll, existing PF/insurance, and goals
Chooses the right regime (old vs new) and fills deductions in optimal order
Uses direct mutual funds and low‑cost choices to cut hidden distributor fees

Tax benefits and limits

Your plan maximizes permitted buckets under current rules:

80C (₹1.5 lakh): EPF, PPF, ELSS, 5‑yr FD, life insurance, principal on home loan
NPS add‑on: 80CCD(1) within 80C ceiling and extra 80CCD(1B) up to ₹50,000
Employer NPS: 80CCD(2) up to 10% of salary (14% for central govt employees)
80D (health insurance): Up to ₹25,000 for self/family; extra up to ₹25,000 for parents (₹50,000 if any insured is 60+)
24(b) home‑loan interest: Up to ₹2,00,000 for self‑occupied; no upper cap for let‑out
80TTA/80TTB: Savings interest up to ₹10,000 (₹50,000 for senior citizens)

Returns, risk and lock-in

Invsify blends instruments to your profile:

Market‑linked growth: ELSS/NPS for higher long‑term returns (ELSS 3‑yr lock‑in; NPS till retirement with partial exits)
Stable core: EPF/PPF for low‑risk, EEE benefits (PPF 15‑yr tenure with partial withdrawals)
Liquidity layer: Health/term insurance for protection; savings interest and cash buffers for access
Fixed income: 5‑yr tax‑saving FD for certainty (interest taxable)

Old vs new tax regime fit

Old regime: Best if you can fully use 80C/80D/24(b), SSY, etc.
New regime: Favor if deductions are low; still leverage NPS 80CCD(1)/(1B)/(2) and home‑loan interest under 24(b) as applicable.

Who should choose this

Salaried Indians who want a single, transparent plan to minimize tax outgo, avoid mis‑selling, reduce fees, and align every deduction with real goals like retirement, a home, or child education.

Pro tips

Fill order smartly: EPF/PPF/ELSS → NPS (add ₹50k 80CCD(1B)) → 80D → 24(b).
Use payroll: Activate employer NPS 80CCD(2); it’s over and above your 80C.
Start April SIPs: Spread ELSS/NPS across the year to cut volatility and avoid March rush.
Proofs, not panic: Track premiums, rent, interest certificates; submit by HR deadlines.
Cut costs: Prefer direct funds; small expense‑ratio savings compound big over years.

2. ELSS (equity-linked savings schemes)

ELSS is the most growth‑oriented way to save tax under Section 80C. It’s a diversified equity mutual fund with a mandatory 3‑year lock‑in—shorter than PPF, NSC, or tax‑saving FDs—making it a practical choice for salaried investors who can stomach equity volatility in exchange for higher long‑term return potential.

What it is

An equity mutual fund designated for tax saving. You can invest lump sum or via SIPs; each SIP installment gets its own 3‑year lock‑in. Because it’s market‑linked, returns are not guaranteed and can be volatile over short periods.

Tax benefits and limits

Deduction: Up to ₹1.5 lakh under Section 80C (available in the old tax regime).
No 80C in new regime: You can still invest, but no deduction.
Tax on gains (post lock‑in): Long‑term capital gains (LTCG) from equity are taxed at 12.5% on gains above ₹1.25 lakh in a financial year (as per current rules).
Dividends: Taxed at your slab; fund houses deduct 10% TDS on dividends over ₹5,000.
Each SIP installment qualifies independently for 80C and has its own 3‑year clock.

Returns, risk and lock-in

ELSS aims for long‑term equity growth; many providers cite a broad long‑cycle range of ~9–15% p.a., but outcomes vary. The 3‑year lock‑in is a minimum, not a recommendation—equities work best with a 5–7+ year horizon. Expect short‑term drawdowns; negative 3‑year outcomes are possible if markets correct near your exit.

Old vs new tax regime fit

Old regime: Strong fit if you can use the ₹1.5 lakh 80C limit and want equity exposure with the shortest lock‑in among 80C options.
New regime: Consider ELSS purely for wealth creation (no 80C benefit). Capital‑gains and dividend tax rules apply regardless of regime.

Who should choose this

Investors with a moderate‑to‑high risk appetite, long horizon (5–7+ years), and the goal of compounding wealth, especially if EPF/PPF alone won’t meet equity allocation needs. Avoid if your goal is <5 years away or if volatility keeps you from staying invested.

Pro tips

SIP through the year: Smooth entry and avoid March rush; remember each SIP has its own 3‑year lock.
Pick “Direct – Growth” plans: Lower costs and tax‑efficient compounding vs dividend options.
Diversified ELSS only: Prefer consistent process, reasonable expense ratios, and long track records; avoid thematic bets.
Plan exits: Don’t auto‑redeem at 3 years—stagger redemptions around goals and market conditions.
Coordinate 80C: After EPF, use ELSS to fill remaining 80C only if it matches your risk profile.

3. Public Provident Fund (PPF)

If you want a rock‑solid, government‑backed anchor inside your 80C bucket, PPF is one of the best tax saving schemes to pair with EPF. It trades liquidity for stability: a long 15‑year tenure with fully tax‑free interest and maturity, ideal for long‑term goals.

What it is

PPF is a small‑savings account you open at a bank or post office. The government notifies the interest rate every quarter and it stays fixed for that quarter. You can contribute during the year (lump sum or installments) toward a long‑horizon, low‑risk corpus.

Key fact	PPF snapshot
Tenure	15 years
Current interest rate	7.1% p.a. (government‑notified)
Tax status	EEE: investment, interest, and maturity are tax‑exempt
Contribution cap	Up to ₹1.5 lakh per financial year

Tax benefits and limits

Deduction up to ₹1.5 lakh under Section 80C (within the overall 80CCE ceiling that also includes 80CCC and 80CCD[1]).
EEE treatment: your investment, the interest credited, and final maturity proceeds are tax‑free as per current law.

Returns, risk and lock-in

PPF is sovereign‑backed and low risk. The rate is government‑set (7.1% p.a. currently) and can change quarterly. The lock‑in is 15 years, with limited withdrawal flexibility as per rules, so treat it as a long‑term, stability‑focused allocation rather than a liquidity source.

Old vs new tax regime fit

Old regime: Strong fit because you can claim 80C.
New regime: No 80C deduction, but interest and maturity remain tax‑exempt under the EEE framework.

Who should choose this

Salaried investors seeking a safe, tax‑efficient debt core for long‑term goals (retirement, child education) and those who prefer predictability over market swings. It’s especially useful if your EPF doesn’t fully exhaust 80C and you still want low‑risk exposure.

Pro tips

Coordinate 80C: Count EPF, life‑insurance premiums, ELSS, home‑loan principal—fill the remaining room with PPF.
Automate contributions early in the year to stay disciplined and avoid March rush.
Keep statements/passbook handy as proof for HR; PPF is a clean, documentation‑friendly 80C component.
Don’t chase short horizons with PPF—use it to anchor your long‑term asset mix while equities (ELSS/NPS) drive growth.

4. National Pension System (NPS)

NPS is a low‑cost, market‑linked retirement account that invests your money across equities, corporate bonds and government securities. It is one of the best tax saving schemes because it stacks multiple deductions on top of 80C, and still keeps costs lean—ideal for building a disciplined retirement corpus through payroll.

What it is

NPS Tier I is the core retirement account with restrictions on withdrawal; Tier II is an optional, flexible account without tax benefits. You can choose lifecycle “auto” allocation or pick funds manually (“active choice”) across equity, corporate debt and G‑Secs.

Tax benefits and limits

You get three powerful layers of tax savings with NPS Tier I as per current rules:

80CCD(1): Employee contribution eligible within the overall ₹1.5 lakh 80C/80CCE ceiling (up to 10% of salary: Basic + DA for salaried).
80CCD(1B): Additional, over‑and‑above deduction of ₹50,000 exclusively for NPS.
80CCD(2): Employer’s contribution up to 10% of salary (14% for central government employees) is deductible and sits outside your 80C limit.
Partial withdrawal: Up to 25% of own contributions after 60 months is permitted for specified purposes and is tax‑exempt.
Exit at retirement: Up to 60% lump sum is tax‑exempt; remaining 40% must buy an annuity.

Note: Tax benefits apply to Tier I; Tier II has no tax breaks.

Returns, risk and lock-in

NPS is market‑linked; many providers indicate a broad long‑cycle return range of about 9–12% p.a., but outcomes vary by asset mix and markets. Tier I is locked till retirement, with limited partial withdrawals; that long lock‑in enforces discipline but reduces liquidity. Equity choices add growth potential with interim volatility; debt/G‑Secs anchor stability.

Old vs new tax regime fit

Old regime: Excellent—combine 80CCD(1) within 80C + the extra ₹50,000 under 80CCD(1B) + employer 80CCD(2).
New regime: Still attractive—NPS is among the few instruments where 80CCD(1) and 80CCD(1B) are allowed; employer 80CCD(2) remains a strong payroll benefit.

Who should choose this

Salaried investors serious about retirement, comfortable with a long lock‑in, and wanting automated, low‑cost compounding via payroll. Particularly useful if you’re in the new regime (to still claim NPS deductions) or if you can secure employer contributions.

Pro tips

Turn on payroll NPS: Capture employer 80CCD(2)—it’s over and above your 80C.
Max the kicker: Contribute the extra ₹50,000 under 80CCD(1B) every year.
SIP it monthly: Smooths market swings and avoids year‑end cash crunch.
Choose allocation deliberately: Lifecycle auto choice works for most; go active only if you’ll review annually.
Plan exits early: Keep annuity choices and proof of contributions handy as you near retirement.

5. Employee Provident Fund (EPF)

EPF is the salaried Indian’s default retirement pot. A slice of your basic pay gets auto‑invested every month, your employer contributes too, and EPFO credits a government‑notified interest rate—historically steady and low risk—making EPF a dependable debt core in your overall asset mix.

What it is

A mandatory, payroll‑linked retirement scheme managed by EPFO for eligible salaried employees. Contributions are deducted before money hits your bank, building a disciplined corpus you can transfer across jobs using your UAN rather than withdrawing prematurely.

Tax benefits and limits

80C deduction (old regime): Your own EPF contribution counts toward the ₹1.5 lakh Section 80C limit.
EEE treatment: As per current rules, interest credited and maturity (on qualifying exits) are tax‑exempt.
Holding period: Withdrawals after 5 years of continuous service are tax‑free; earlier withdrawals are taxable and may attract TDS.

Returns, risk and lock-in

EPF is low risk and government‑backed. EPFO declares the rate annually (recent communications show around 8.25% p.a. as indicative), credited yearly to your passbook. Liquidity is limited: you can take specific advances, but full access generally comes at retirement/job exit. Treat EPF as long‑term debt; early withdrawals hurt compounding and can trigger tax.

Old vs new tax regime fit

Old regime: Strong fit—your EPF contribution helps fill 80C, reducing taxable income.
New regime: No 80C deduction, but EPF still compounds with the same credited rate; tax‑exempt status on interest/maturity continues per prevailing EPF rules.

Who should choose this

All salaried employees covered by PF. It’s ideal if you want a stable, tax‑efficient debt foundation while using equity options (ELSS/NPS) for growth. Skip early withdrawals unless absolutely necessary.

Pro tips

Transfer, don’t withdraw: Use your UAN to move EPF when changing jobs; preserve the 5‑year continuity for tax‑free status.
Plan 80C smartly: Count EPF first, then allocate the remaining 80C room to PPF/ELSS/home‑loan principal.
Audit annually: Check EPF passbook, KYC and nomination; match contributions with Form 16.
Use advances judiciously: Only for eligible needs; avoid breaking compounding on your retirement core.

6. Health insurance (Section 80D)

Health insurance is a foundation, not a “tax trick.” One hospitalization can wipe out years of savings; the 80D deduction simply rewards you for protecting your family. Prioritize the right sum insured and a clean claim experience—then optimize premiums for tax efficiency.

What it is

A medical insurance policy (individual/floater) that pays for hospitalization and related healthcare costs. You can also add medical riders (like critical illness) to term insurance; these rider premiums may also qualify under Section 80D.

Tax benefits and limits

Under current rules, premiums paid via non‑cash modes qualify for deductions in the old regime:

Covered lives	Deduction (under 60)	Deduction (60+ insured)
Self + spouse + dependent children	Up to ₹25,000	Up to ₹50,000
Parents (additional)	Up to ₹25,000	Up to ₹50,000

Maximum potential: ₹75,000 if you’re <60 and parents are 60+; ₹1,00,000 if both insured buckets are 60+.
Preventive health check‑up: Up to ₹5,000 is allowed within the above 80D limits (not over and above).
Term plan riders: Premiums for medical riders attached to term insurance can qualify under 80D.

Returns, risk and lock-in

Returns: None. This is risk transfer, not investment; the “payout” is claim settlement when needed.
Risk: Under‑insurance is the real risk—choose adequate cover.
Lock‑in: No lock‑in for the deduction beyond keeping the policy active for the year; policy term and waiting periods apply as per the contract.

Old vs new tax regime fit

Old regime: 80D is a powerful, stackable deduction alongside 80C/80CCD/24(b).
New regime: No 80D deduction. Still, buy health insurance for protection; tax should not drive this decision.

Who should choose this

Every salaried household. Even if your employer provides group cover, maintain a personal policy to stay protected during job changes and to customize sum insured, add‑ons, and network hospitals.

Pro tips

Max the split: If parents are senior citizens, structure premiums to capture the higher 80D slab (e.g., ₹25k self bucket + ₹50k parent bucket).
Pay digitally: Cash payments don’t qualify (except allowed check‑up spends). Keep premium receipts/policy schedule for proofs.
Right cover first: Pick adequate sum insured and a reputable insurer/network; tax benefit is secondary.
Add riders smartly: Critical illness/medical riders on term plans can add 80D efficiency.
Renew early: Avoid lapse to prevent waiting periods from restarting and to ensure proof submission to HR on time.

7. Home loan deductions (Sections 24(b) and 80C; first-time buyer add-ons)

Your home loan can be a powerful tax optimizer when used right. Between interest under Section 24(b), principal under 80C, and an extra first‑time buyer boost under 80EE, salaried borrowers can meaningfully reduce taxable income while building an asset for the long term.

What it is

Tax provisions that allow you to claim:

Interest paid on a home loan against “income from house property”
Principal repaid as part of the 80C basket
An additional first‑home deduction (subject to conditions)

Tax benefits and limits

Section 24(b) – Interest on home loan:
- Self‑occupied: Deduction up to ₹2,00,000 per year.
- Let‑out property: No upper cap on the interest deduction (as per prevailing guidance).
- Pre‑construction interest: Eligible to claim in 5 equal installments starting the year construction completes (within the overall ₹2,00,000 limit for self‑occupied).
Section 80C – Principal repayment:
- Part of the overall ₹1,50,000 80C limit (shared with EPF, PPF, ELSS, etc.).
Section 80EE – First‑time buyer add‑on:
- Additional deduction up to ₹50,000 per year on interest, over and above 24(b), if:
  - Loan amount ≤ ₹35,00,000, and
  - Property value ≤ ₹50,00,000, and
  - You’re buying your first residential property.

Returns, risk and lock-in

There’s no “investment return” from a deduction; the benefit is lower tax outgo while you build home equity. Property is illiquid and interest‑rate sensitive; plan EMIs to protect cash flow. No statutory lock‑in on claiming deductions beyond the loan/ownership timelines and rules for pre‑construction interest.

Old vs new tax regime fit

Old regime: Most efficient—claim principal under 80C, interest under 24(b), plus first‑time buyer 80EE (if eligible).
New regime: 24(b) deduction remains available, while 80C and 80EE are not. This can still be compelling if you have significant interest outgo.

Who should choose this

Salaried borrowers with an active home loan, especially:

Old‑regime taxpayers looking to stack 80C + 24(b) + 80EE (if eligible)
New‑regime taxpayers with high interest payments (to use 24(b))
First‑time buyers meeting 80EE conditions

Pro tips

Get the bank’s interest certificate: It splits principal vs interest for accurate 80C and 24(b) claims.
Claim pre‑construction interest right: Spread over 5 equal installments from the year of completion.
Use 80EE if eligible: It sits over and above the ₹2,00,000 24(b) cap for first‑time buyers meeting the limits.
Keep proof current: Sanction letter, possession/completion documents, and annual certificates help ensure smooth HR/ITR processing.

8. Tax-saving fixed deposits (5-year bank/post office FD)

When you want guaranteed returns with simple paperwork, 5-year tax-saving FDs are the most straightforward way to use your 80C limit. They trade flexibility for certainty: a fixed rate, fixed tenure, and fixed rules—ideal for conservative savers who don’t want market risk inside their tax plan.

What it is

A special 5-year fixed deposit from banks or post offices that qualifies for Section 80C. You can choose cumulative (interest reinvested) or non‑cumulative (regular interest payout). Unlike regular FDs, these cannot be broken prematurely (except in case of death), and loans/overdrafts against them aren’t allowed.

Key fact	FD snapshot
Tenure	5 years (lock‑in)
80C eligibility	Yes, up to ₹1.5 lakh (old regime)
Premature closure/loan	Not permitted (except death)
Interest	Taxable at slab; TDS if interest > ₹40,000 (₹50,000 for seniors)

Tax benefits and limits

Deduction up to ₹1.5 lakh under Section 80C (shared with EPF, PPF, ELSS, life insurance, home‑loan principal, etc.).
Available in the old regime; no 80C benefit in the new regime.
Interest is fully taxable at your slab. Banks deduct 10% TDS when your annual bank‑interest crosses ₹40,000 (₹50,000 for senior citizens), subject to PAN/TDS rules.

Returns, risk and lock-in

Bank/post office and tenor‑dependent rates; many listings indicate about 5.5%–7.75% p.a., seniors often get a small bump.
Virtually no credit/market risk; the trade‑off is a hard 5‑year lock‑in and tax on interest, which reduces post‑tax returns for higher slabs.

Old vs new tax regime fit

Old regime: Useful if you still need to fill 80C but don’t want equity risk or long PPF lock‑ins.
New regime: No 80C benefit; evaluate only for capital safety/liquidity needs (consider non‑tax‑saver FDs then).

Who should choose this

Conservative salaried investors who value guaranteed returns and paperwork simplicity, need to top up 80C after EPF/life‑insurance, and are comfortable with a 5‑year lock‑in. Also suits those nearing retirement who prefer fixed income over equity volatility.

Pro tips

Stagger deposits: Open multiple smaller FDs across months to ladder maturities post lock‑in.
Pick payout wisely: Choose non‑cumulative if you need regular income; cumulative if you want compounding.
Mind TDS: Ensure PAN is updated; use Form 15G/15H only if your total income is below the taxable limit.
Compare issuers: Bank vs post office rates can differ—pick the better net post‑tax outcome.
Coordinate 80C: Count EPF first; then use FDs only if ELSS/PPF don’t fit your risk or time horizon.

9. Unit linked insurance plans (ULIPs)

ULIPs bundle life cover with market‑linked investing. A slice of your premium pays for insurance; the rest goes into equity/debt funds you choose. Expect market volatility, layered charges, and a mandatory 5‑year lock‑in. As insurers state: the investment risk in the portfolio is borne by the policyholder.

What it is

A hybrid policy that offers life cover plus investment into insurer‑managed funds (equity, debt or balanced). You can switch funds within the policy and keep the cover active by paying premiums as scheduled.

Tax benefits and limits

Premium deduction (old regime): Eligible under Section 80C up to ₹1.5 lakh (shared limit).
Maturity proceeds (Section 10(10D)): Exempt subject to conditions:
- For ULIPs issued on/after 1 Feb 2021, keep total annual premium ≤ ₹2.5 lakh to retain tax‑free maturity; above this, maturity is taxable.
- Premium should not exceed 10% of Sum Assured for policies issued on/after Apr 1, 2012 (20% for older policies) to qualify.
Death benefit: Tax‑free under Section 10(10D).
Surrender before 5 years: Benefits can turn taxable.

Returns, risk and lock-in

Indicative long‑cycle return potential: ~9%–15% p.a. (varies by fund mix and markets).
Lock‑in: 5 years.
Risk: Market risk on fund value; early years see higher impact from policy charges. No guaranteed returns.

Old vs new tax regime fit

Old regime: Use for 80C if you specifically want insurance+investment in one wrapper.
New regime: No 80C deduction; 10(10D) conditions on death/maturity apply as per law, independent of regime.

Who should choose this

Investors seeking a single contract for protection plus investing, willing to commit 5+ years, and comfortable managing fund choices. If you prefer maximum transparency and flexibility, many opt for term insurance + ELSS/NPS/PPF instead.

Pro tips

Mind the thresholds: Keep annual premium ≤ ₹2.5 lakh and within 10% of Sum Assured to preserve 10(10D) maturity exemption.
Don’t surrender early: Crossing the 5‑year mark avoids tax pitfalls and maximizes compounding.
Allocate deliberately: Use equity funds for long horizons; shift gradually to debt as goals near.
Review annually: Check fund performance, charges, and Sum Assured adequacy; switch funds, don’t chase fads.
Insure right first: Ensure life cover meets needs; ULIP cover shouldn’t replace a robust term plan.

10. Sukanya Samriddhi Yojana (SSY)

For parents of a girl child, SSY is a simple, government‑backed way to ring‑fence money for future education or marriage while unlocking tax efficiency. It’s purpose‑built, disciplined, and among the best tax saving schemes for long horizons where safety matters more than liquidity.

What it is

A small‑savings scheme for the girl child, backed by the Government of India. You make periodic contributions and the account compounds at a notified rate. Withdrawals are restricted until long‑term milestones, which helps you stay invested for the intended goal.

Key fact	SSY snapshot
Indicative interest rate	8.20% p.a. (government‑notified)
Lock‑in	Earlier of 21 years or marriage of the girl
Tax status	Interest and maturity fully tax‑free (Sec 10)
Deduction	Eligible under Section 80C (old regime)

Tax benefits and limits

Contributions qualify for deduction up to ₹1.5 lakh under Section 80C (within the overall 80C basket).
Interest earned and maturity proceeds are tax‑free under Section 10 as per current rules.

Returns, risk and lock-in

Government‑set rate (currently 8.20% p.a.) offers low‑risk, fixed‑income compounding.
Hard lock‑in until the earlier of 21 years or marriage of the girl ensures goal discipline; treat it as a long‑term bucket, not a liquidity source.

Old vs new tax regime fit

Old regime: Strong fit—claim 80C on contributions, with tax‑free interest and maturity.
New regime: No 80C deduction; interest and maturity remain tax‑exempt per Section 10.

Who should choose this

Parents/guardians aiming to build a safe, tax‑efficient corpus for a daughter’s long‑term milestones, and who value sovereign backing over market returns. Works best alongside equity allocation (in your name) if the goal is many years away and you need higher growth potential.

Pro tips

Prioritize 80C order: Count EPF and mandatory items first; use SSY to fill remaining 80C if the goal fits.
Automate contributions: Monthly auto‑debits remove last‑minute March stress and smooth cash flows.
Match to goal timing: Use SSY for the guaranteed base; complement with ELSS/NPS (in your portfolio) for growth if horizon >7–10 years.
Keep proofs ready: Maintain deposit slips/account statements for HR proof and ITR records.
Stay the course: Avoid using SSY for near‑term needs—the lock‑in is by design to protect the goal.

11. Term life insurance (Section 80C and Section 10(10D))

A pure term plan is the cleanest way to protect your family’s income if something happens to you. You pay a small annual premium for a large sum assured; if the insured event occurs, your nominee gets the payout. There’s no investment element—just efficient, high-coverage protection with straightforward tax treatment.

What it is

A life insurance contract that pays a lump sum to your nominee on death during the policy term. Variants like “return of premium” (ROP) refund premiums on survival but cost more and still don’t behave like true investments.

Tax benefits and limits

Premium deduction (old regime): Eligible under Section 80C up to ₹1.5 lakh (shared with EPF/PPF/ELSS/home‑loan principal).
Death benefit: Exempt under Section 10(10D).
Medical riders: Premiums for eligible health riders (e.g., critical illness) may qualify under Section 80D subject to limits and conditions.
Note: For policies to enjoy 10(10D) benefits, conditions such as premium not exceeding a prescribed percentage of Sum Assured apply as per current law.

Returns, risk and lock-in

Returns: None—this is pure risk cover; ROP is a costlier variant, not a growth product.
Risk: Inadequate cover or lapses.
Lock‑in: No investment lock‑in; keep premiums paid and policy active to retain protection and claim 80C/80D for that year.

Old vs new tax regime fit

Old regime: Strong fit—80C on base premium; 80D on eligible medical riders; death benefit tax‑free under 10(10D).
New regime: No 80C/80D deductions; death benefit remains tax‑exempt under 10(10D).

Who should choose this

Anyone with dependents or liabilities who needs affordable, high cover to secure income replacement and goals (loans, kids’ education), regardless of tax regime.

Pro tips

Buy pure term, adequate cover: Focus on sum assured and long tenure; avoid mixing investments.
Add riders wisely: Use critical illness/medical riders for 80D efficiency and broader protection.
Keep proofs handy: Premium receipts and policy schedule for HR/ITR.
Start early, pay annually: Younger age locks lower premiums; annual mode aligns with proof cycles.
Review nominations and insurer network: Keep nominee details updated and choose a reliable insurer with a clean claims process.

12. Savings account interest (Section 80TTA/80TTB)

Your idle cash isn’t just sitting there—bank and post‑office savings accounts pay interest, and the tax code gives a small cushion on that. Claiming this correctly is easy money most salaried folks miss while rushing to fill 80C.

What it is

Interest you earn in savings bank or post‑office savings accounts. Rates are modest (many banks hover around 3%–4% p.a.), but there’s no lock‑in and you keep full liquidity for bills, EMIs, and emergencies.

Tax benefits and limits

Under current rules for the old tax regime:

Section 80TTA (non‑seniors): Deduction up to ₹10,000 on interest from savings accounts with banks, co‑ops, or post offices.
- Formula: Deduction = min(total eligible savings interest, ₹10,000)
Section 80TTB (resident senior citizens, 60+): Deduction up to ₹50,000 on interest from deposits with banks/co‑ops/post offices. This includes savings account interest and typically extends to fixed/term deposits for seniors.
- You cannot claim 80TTA and 80TTB together; seniors use 80TTB.
Amounts above these limits are taxable at your slab.

Returns, risk and lock-in

Returns: Variable, typically ~3%–4% p.a.
Risk: Very low market risk; the real risk is inflation eroding purchasing power.
Lock‑in: None; full liquidity for day‑to‑day needs.

Old vs new tax regime fit

Old regime: 80TTA/80TTB deductions apply as above.
New regime: These deductions are not available; interest is fully taxable at slab.

Who should choose this

Everyone with a savings account should track and claim the eligible deduction under the old regime. Senior citizens with sizable bank interest often benefit meaningfully from 80TTB if they remain in the old regime.

Pro tips

Track interest early: Pull annual interest summaries from net‑banking; reconcile across all accounts.
Claim correctly: Report gross interest under “Income from Other Sources,” then deduct under 80TTA (or 80TTB for seniors).
Don’t chase returns here: Keep just your operating buffer; push surplus into better‑yielding, goal‑linked options.
Regime check: If shifting to the new regime, remember you lose 80TTA/80TTB—re‑run your tax math before April.
Senior strategy: If interest income is high, compare old vs new carefully—80TTB can swing the decision in favor of the old regime.

Conclusion

The smartest tax plan is the one you can actually execute all year—filling the right deductions in the right order, matching risk to goals, and avoiding products that lock you in without purpose. With this 12‑option shortlist, you can stack the old regime efficiently (80C, 80D, 80CCD, 24[b]) or stay lean in the new regime while still using NPS and home‑loan interest where it counts. Anchor safety with EPF/PPF/SSY, drive growth with ELSS/NPS, cover risks with term and health insurance, and use FDs and 80TTA/80TTB tactically.

If you want a conflict‑free, done‑for‑you route—complete with regime selection, optimal allocation, fee‑aware product choices, and proof tracking—let our SEBI‑registered advisory build your plan and keep you on course. Start your personalized, goal‑linked tax‑saving strategy with Invsify today: Get smart, conflict‑free advice.