Smart tax planning is not just about saving money, it’s about building wealth while staying compliant. By planning your taxes early, you can legally reduce your liability and maximize savings.
Here’s a complete step-by-step tax planning guide for FY 2025-26.
Know Your Taxable Income 
First, calculate your total taxable income from:
Salary
Business/Professional income
Capital gains
Rental income
Other income (interest, dividends, etc.)
Tip: Keep all salary slips, Form 16, bank statements, and investment proofs ready.
Choose Between Old vs New Tax Regime 
Old Regime: Higher slabs but allows deductions like 80C, 80D, HRA, NPS.
New Regime: Lower slab rates but no deductions (simpler).
Use an online tax calculator to see which regime saves more tax.
Maximize 80C Deductions 
Invest up to ₹1.5 lakh in any combination of:
ELSS
PPF
Life Insurance
Tax Saving FD
Home Loan Principal
Don’t Forget Section 80D – Health Insurance 
Self/Family: ₹25,000
Senior Parents: ₹50,000
Preventive health check-ups: ₹5,000
Invest in NPS (Section 80CCD(1B)) 
Additional ₹50,000 deduction over 80C
Retirement-focused investment
Tax-free partial withdrawals after 5 years
Claim HRA & Other Allowances
HRA (House Rent Allowance) exemption for salaried employees
Standard deduction: ₹50,000
LTA, education loan interest, donations under 80G
Plan Capital Gains & Long-Term Investments 
Sell stocks/mutual funds strategically to reduce tax
Use long-term capital gains exemption (up to ₹1 lakh per year)
Offset gains with losses from other investments
Track Your Investments & Proofs 
Maintain receipts for all investments
Ensure payments are done via banking channels (no cash for deductions)
Keep Form 26AS updated for TDS verification
File ITR Early & Verify
Avoid last-minute rush and errors
Choose correct ITR form based on income
Verify ITR using Aadhaar OTP, net banking, or digital signature
Common Mistakes to Avoid 
Not claiming eligible deductions
Filing under wrong regime
Missing TDS or income entries
Late filing & not verifying ITR
Final Thoughts
Early and systematic tax planning helps you reduce liability, grow wealth, and stay compliant. Start planning at the beginning of the financial year, and combine deductions like 80C, 80D, and 80CCD(1B) with smart investments for maximum benefit.
