Under the new tax regime for FY 2024-25 in India, taxpayers have fewer options to save taxes compared to the old tax regime since most exemptions and deductions have been removed. However, there are still a few ways to reduce your tax liability while adhering to the new tax structure. Here’s a list of some of the key ways you can save taxes under the new tax regime:

1. Tax Rebate under Section 87A

• Rebate Eligibility: If your taxable income is up to ₹7 lakh in FY 2024-25, you can avail of a tax rebate of up to ₹25,000. This effectively means that if your income is within this limit, you won’t have to pay any tax at all.
• Key Point: This rebate is available only in the new tax regime and is applicable to individuals below the income threshold of ₹7 lakh.

2. Higher Standard Deduction for Salaried and Pensioners

• A standard deduction of Rs 75,000 is now available under the new tax regime for salaried individuals. This deduction was previously available only under the old tax regime

3. NPS (National Pension Scheme) Contribution

• Under the new tax regime, you can still claim a deduction of up to ₹50,000 on contributions made to NPS (National Pension Scheme) under Section 80CCD(1B). This deduction is available over and above the ₹1.5 lakh limit under Section 80C.
• Key Point: If you are contributing to NPS, this deduction can provide additional savings on your tax bill.

4. Employer’s Contribution to NPS (Section 80CCD(2))

• Contributions made by your employer to your NPS account can also be deducted under Section 80CCD(2). There is no cap on this deduction, as long as the contribution does not exceed 14% of your salary (Basic + DA) and 14% For Central Govt. employee.
• Key Point: This is especially beneficial for salaried individuals with NPS contributions from their employers.

5. Affordable Housing Tax Benefit (Section 80EEA)

• If you have taken a home loan for purchasing an affordable house, you can avail of a deduction of up to ₹1.5 lakh on interest paid under Section 80EEA.
• Eligibility: The house property should be valued at ₹45 lakh or less, and the loan must be sanctioned between April 1, 2019, and March 31, 2022. While this benefit was initially available for loans taken before March 2022, it’s important to verify if the government extends it further.

6. Interest on Home Loan (Section 24(b))

• You can claim a deduction of up to ₹2 lakh per year on the interest paid on your home loan under Section 24(b) if you own a self-occupied property.
• Key Point: This is applicable to loans taken for the purchase, construction, or renovation of the property.

7. Family Pension

• Deduction on family pensions has been increased:
  • From ₹15,000 to ₹25,000

8. For non-equity assets

LTCG tax rate has reduced from 20% to 12.5%.

8. Tax Benefits for Charitable Donations

• Though most deductions under the old tax regime (like Section 80G) are not available under the new regime, some donations made to approved charitable institutions can still be deducted under Section 80G.
• Key Point: The eligibility for such deductions depends on the type of charity and the institution’s recognition by the government.

9. Reinvesting in Agricultural Bonds (Section 54EC)

• Taxpayers can invest long-term capital gains (LTCG) in certain bonds like Rural Development Bonds (Section 54EC). This provides an exemption from capital gains tax if reinvested within 6 months of the sale.

For more Details Click on Practical Income Tax Calculation for FY 2024-25