How to Save Tax in India Using 80C, 80D and 80G (FY 2025–26)

What Is Section 80C?

Section 80C allows deductions of up to ₹1.5 lakh per financial year on specified investments and expenses.

Indian taxpayers primarily reduce taxable income under Section 80C through a mix of fixed-income and market-linked instruments, as outlined on the Income Tax Department portal.

Section 80C Deduction List (FY 2025–26)

Official rates for small savings schemes like PPF, SCSS, and NSC are notified quarterly by the Ministry of Finance (https://www.finmin.nic.in).

Top tax-saving investments under Section 80C for 2025 include PPF, ELSS mutual funds, NSC, and tax-saving fixed deposits.

Who Should Choose Which 80C Option?

• Conservative investors: PPF, NSC

• Market-oriented investors: ELSS funds (regulated by Securities and Exchange Board of India – https://www.sebi.gov.in)

• Senior citizens: SCSS (higher interest, government-backed)

A diversified mix under Section 80C helps balance safety, liquidity, and growth.

Section 80D: Health Insurance Tax Benefits

Medical inflation in India continues to rise, making health insurance both a necessity and a tax-saving tool.

Deduction Limits Under Section 80D

You can claim deductions for health insurance premiums paid for:

• Self, spouse, and dependent children

• Parents (separately)

Limits for FY 2025–26:

• Up to ₹25,000 for self and family

• Additional ₹25,000 for parents

• Up to ₹50,000 if parents are senior citizens

Section 80D details are officially explained on the Income Tax Department website and apply only to insurance premiums paid via non-cash modes.

Section 80D is one of the most efficient deductions, combining tax savings with financial protection.

Section 80G: Tax Benefits on Donations

The Government of India promotes philanthropy by offering tax deductions under Section 80G.

How Section 80G Works

Donations made to approved institutions qualify for deductions of:

• 50% or 100%, with or without qualifying limits

Eligible institutions include:

• PM National Relief Fund – https://pmnrf.gov.in

• Swachh Bharat Kosh – https://swachhbharatkosh.gov.in

• Approved charitable trusts and NGOs registered under the Income Tax Act

Only donations made through non-cash modes and supported by valid receipts are eligible, as clarified by the Income Tax Department.

Additional Tax Saving Beyond Section 80C

Section 80CCD(1B): NPS Extra Deduction

Taxpayers can claim an additional ₹50,000 deduction by investing in the National Pension System (NPS) under Section 80CCD(1B).

This benefit is over and above the ₹1.5 lakh limit of Section 80C, making NPS one of the most powerful retirement-linked tax-saving tools.

NPS is regulated by the Pension Fund Regulatory and Development Authority (https://www.pfrda.org.in).

Smart Tax Saving Strategy for FY 2025–26

A well-structured approach:

• Fully utilise Section 80C for long-term investments

• Claim Section 80D for health insurance

• Use Section 80G for eligible donations

• Add NPS under 80CCD(1B) for extra tax efficiency

This layered strategy maximises deductions while aligning tax planning with long-term financial goals.

Common Tax Saving Mistakes to Avoid

• Choosing investments only for tax benefits

• Ignoring lock-in periods and liquidity needs

• Missing insurance premium payment deadlines

• Opting for the New Tax Regime unintentionally

Effective tax planning should support wealth creation, not just short-term savings.

Final Thoughts: Save Tax the Smart Way

Tax-saving investments under Sections 80C, 80D, and 80G remain the backbone of personal tax planning for Indian taxpayers under the Old Tax Regime. When selected wisely, these options reduce tax liability while helping build wealth, protect health, and support social causes.

Plan early, invest thoughtfully, and let tax savings work alongside your financial goals for FY 2025–26.

Click here for such more articles……