by Introduction
If your March looks like a mad dash for proofs, this guide to the Top 10 Tax-Saving Mistakes is for you. Salaried professionals repeatedly lose money to small filing errors, skipped deductions, and last-minute choices between regimes. Below, we list the Top 10 Tax-Saving Mistakes and the quick fixes you can apply right away so your salary actually stays with you.
Why this topic matters now
From FY 2023–24 onward, India’s new tax regime is the default—you can still choose the old regime if it suits you better, but you need to decide smartly and in time. The Income Tax Department and PIB both state that the new regime is default, while employees may opt for old before filing if it benefits them. Also, a standard deduction of ₹50,000 applies in both regimes from AY 2024–25. Getting these basics wrong can cost you thousands every year. Press Information Bureau+1
Quick context you can rely on (official & current):
• New regime is default; you can still choose old if it fits. Press Information Bureau
• Standard deduction ₹50,000 available in both regimes (from AY 2024–25). Income Tax Department
• Form 16 typically arrives by 15 June for the previous FY—don’t miss checking it. cleartax+1
The Top 10 Tax-Saving Mistakes
1) Choosing a regime without comparing your numbers
The mistake: Defaulting to the new regime “because it’s simpler,” or sticking to the old one out of habit.
The fix: Add up deductions you realistically claim (HRA, 80C, 80D, home-loan interest, NPS, etc.). If your total deductions meaningfully exceed the new-regime benefit, old may win; otherwise new often works better. Remember: new is default, but you can switch at filing (rules vary if you have business income). Press Information Bureau+1
2) Assuming 80C went up (it didn’t)
The mistake: Planning around a higher 80C cap that doesn’t exist.
The fix: 80C remains ₹1.5 lakh for FY 2025–26 as per recent coverage; the limit hasn’t changed. Allocate wisely across ELSS, PPF, SSY, tuition fees, etc., only under the old regime (new regime doesn’t allow 80C). The Economic Times+1
3) Ignoring the extra ₹50,000 via NPS (80CCD(1B))
The mistake: Stopping at 80C and missing an additional ₹50,000 deduction via NPS (old regime).
The fix: Contribute to NPS (Tier I) to claim 80CCD(1B) over and above 80C. Check employer NPS contributions too—those can be deductible (up to 10% of salary in old regime; up to 14% in new regime for Gov. employees). National Pension System Trust+1
4) Buying health insurance but missing 80D details
The mistake: Paying premiums yet not claiming correctly; skipping preventive check-up limits.
The fix: Under Section 80D, claim up to ₹25,000 for self/family (non-senior) and ₹50,000 for senior citizens; preventive health check-ups are allowed within the overall limits (recent tutorials cap check-ups at ₹3,000 within the ₹25,000 band). Keep receipts. cleartax+1
5) Waiting till March 31 for investments
The mistake: Last-minute ELSS or NPS buys without considering lock-ins, risk, or liquidity.
The fix: Automate monthly SIPs for ELSS/NPS so you don’t over-invest (or under-invest). Align choices with goals and cash-flow needs, not just tax.
6) Misunderstanding HRA vs. home-loan benefits
The mistake: Claiming HRA while living in your own house without renting, or missing house-rent receipts.
The fix: HRA is an old-regime exemption only; not available in the new regime. For homeowners, interest on a self-occupied property (old regime) can be claimed up to ₹2 lakh u/s 24(b). Compare regimes annually. Income Tax Department
7) Not checking Form 16 carefully
The mistake: Blindly filing based on Form 16 totals.
The fix: Verify PAN, TAN, salary breakup, TDS, chosen regime, deductions, and exemptions. If you had multiple employers, you may get multiple Form 16s; reconcile with AIS/26AS. Expect Form 16 by 15 June for the prior FY; follow up if delayed. The Economic Times
8) Missing employer benefits that cut tax
The mistake: Not opting for tax-efficient components (meal cards, LTA in old regime, NPS employer contribution, etc.).
The fix: Review your CTC structure at the start of the FY. Employer NPS contributions are deductible within limits; LTA works only under old regime and requires travel proofs. PFRDA PROD
9) Treating investment products as “tax hacks”
The mistake: Buying long-tenor products you don’t need just for tax.
The fix: Use a simple checklist: Do I understand returns, risk, liquidity, and lock-in? If not, pause. ELSS may suit growth-oriented investors; PPF fits safety-first with 15-year lock-in. Align with goals first, then optimise tax.
10) Filing late or with inconsistent data
The mistake: Rushing at ITR time, mismatching salary slips, AIS and Form 16.
The fix: Cross-check salary, TDS, interest income, capital gains, and deductions across Form 16, AIS and Form 26AS before filing. Keep proof copies (rent receipts, insurance statements, NPS transaction receipts) handy.
Stat sheet you can bookmark
- New regime = default; salaried individuals can still choose the old regime at filing time (subject to rules). Press Information Bureau+1
- Standard deduction ₹50,000 available in both regimes from AY 2024–25. Income Tax Department
- 80C cap ₹1.5 lakh; unchanged for FY 2025–26 per recent coverage. The Economic Times
- NPS extra deduction ₹50,000 u/s 80CCD(1B) over and above 80C; employer contribution rules apply. National Pension System Trust+1
- Form 16 due date for employers: 15 June for the preceding FY. cleartax
- 80D (health insurance): up to ₹25,000 (self/family under 60) and up to ₹50,000 (senior citizens); check-up allowance within overall cap per Income Tax tutorials. cleartax+1
Practical playbook for salaried employees
- January–March: Freeze your regime choice; finish investments early.
- Quarterly: Update rent receipts, insurance premium proofs, and NPS statements.
- April–June: Verify Form 16 on arrival (by 15 June); match with AIS/26AS and correct discrepancies quickly. The Economic Times
- Anytime: If you move cities or employers, keep all proofs consolidated in one folder (cloud + hard copy).
Tiny anecdote, big learning
A colleague set up a ₹4,000 monthly SIP into ELSS and a ₹4,200 monthly NPS contribution. By March, he’d hit 80C comfortably and used 80CCD(1B) fully—without a year-end scramble. The kicker? Because he compared regimes in April, he realised old regime saved more for him that year. A 20-minute check saved months of stress. 💡
Conclusion
Taxes don’t have to be dramatic. Know the rules that matter, compare regimes once a year, automate what you can, and keep proofs tidy. Do that, and “tax season” becomes a 30-minute checklist—tops.
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10 Trending FAQs
- Is the new tax regime compulsory for salaried employees?
No. It’s the default, but you can choose the old regime if it suits you better at return filing (rules differ if you have business income). Press Information Bureau - What documents should I collect before filing?
Form 16(s), rent receipts, insurance premium statements, NPS/PPF/ELSS proofs, bank interest statements, AIS/26AS. - Can I claim 80C in the new regime?
No. 80C is not available in the new regime. cleartax - Is standard deduction allowed in the new regime?
Yes, ₹50,000 in both regimes from AY 2024–25. Income Tax Department - What is the 80D limit for health insurance?
Up to ₹25,000 for self/family (non-senior) and up to ₹50,000 for senior citizens; preventive check-up within the overall cap. cleartax+1 - When do I get Form 16?
Employers issue it by 15 June for the previous FY. cleartax - What’s the extra ₹50,000 deduction I keep hearing about?
That’s NPS 80CCD(1B)—over and above 80C, available under old regime. National Pension System Trust - Can I switch regimes every year?
Salaried individuals without business income can choose at filing time each year. Press Information Bureau - Does employer NPS contribution help my tax?
Yes—deductible within limits (10% of salary under old regime; 14% for certain govt employees under new regime). PFRDA PROD - I worked for two companies this year—how do I file?
You may receive two Form 16s; reconcile both with AIS/26AS and file one ITR with combined figures. The Economic Times
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