How to Save Tax Beyond Section 80C

How to Save Tax Beyond Section 80C

Section 80C is where most people stop — ₹1.5 lakh in PPF, ELSS, insurance and the like. But once you've used it up, the Income Tax Act offers several more ways to cut your tax bill. This guide walks through the best tax-saving deductions beyond Section 80C for FY 2025-26 (AY 2026-27), from health insurance to an extra NPS deduction and home loan interest.

First, a Reality Check: These Are Mostly Old-Regime Deductions

Here's the catch you must understand before you plan: almost all of these deductions work only under the old tax regime. The new regime gives you lower slab rates but disallows them. So before chasing deductions, decide your tax regime — if you can genuinely claim ₹4–5 lakh or more in deductions, the old regime may still win; otherwise the new regime's lower rates usually come out ahead.

(The one big exception that works in both regimes is your employer's NPS contribution — more on that below.)

The Best Deductions Beyond 80C

Section	What it covers	Limit (FY 2025-26)	Regime
80D	Health insurance premium	₹25,000 (₹50,000 if senior) + up to ₹50,000 for parents	Old
80CCD(1B)	Extra NPS contribution	₹50,000	Old
24(b)	Home loan interest (self-occupied)	₹2,00,000	Old
80TTB	Interest income (senior citizens)	₹50,000	Old
80TTA	Savings account interest (under 60)	₹10,000	Old
80E	Education loan interest	No limit (up to 8 years)	Old
80G	Donations to charity	50% or 100% of donation	Old
80EEB	Electric vehicle loan interest	₹1,50,000	Old
80CCD(2)	Employer's NPS contribution	Up to 14% of salary	Old & New

Section 80D: Health Insurance

You can deduct health insurance premiums for yourself and family — up to ₹25,000, or ₹50,000 if you're a senior citizen. Pay your parents' premiums too and you get an additional ₹25,000 (₹50,000 if they're seniors). A working professional insuring senior-citizen parents can therefore claim up to ₹75,000–₹1,00,000. A ₹5,000 preventive health check-up counts within these limits.

Section 80CCD(1B): An Extra ₹50,000 for NPS

On top of 80C, you can invest in the National Pension System (NPS) and claim an additional ₹50,000 under Section 80CCD(1B) — a deduction that exists purely to reward retirement saving. Estimate your NPS corpus with our NPS Calculator.

Section 24(b): Home Loan Interest

If you have a home loan on a self-occupied property, the interest you pay is deductible up to ₹2 lakh a year under Section 24(b) — separate from the principal you claim under 80C. For a rented-out property, the interest deduction has no upper cap (and uniquely, this let-out interest is allowed even in the new regime).

Sections 80TTA & 80TTB: Interest Income

Under 60? Claim up to ₹10,000 of savings-account interest under 80TTA. A senior citizen? Section 80TTB is far more generous — up to ₹50,000 covering savings and fixed deposit interest. See our guide to tax on FD interest.

Sections 80E, 80G & 80EEB

• 80E: the entire interest on an education loan is deductible, with no upper limit, for up to 8 years.
• 80G: donations to eligible charities and relief funds qualify for a 50% or 100% deduction.
• 80EEB: interest on a loan to buy an electric vehicle is deductible up to ₹1.5 lakh.

What Actually Works in the New Regime

If you're on the new tax regime, most of the above won't apply. What you can still claim:

• The ₹75,000 standard deduction (salaried and pensioners).
• Your employer's NPS contribution under Section 80CCD(2) — up to 14% of your basic salary. This is the single most powerful deduction in the new regime, so ask your employer about the corporate NPS benefit.
• Home loan interest on a let-out property, and the family pension deduction.

How Much Can You Actually Save?

Suppose you're in the 30% tax slab on the old regime. Beyond your ₹1.5 lakh 80C, you claim ₹25,000 (80D) + ₹50,000 (NPS under 80CCD(1B)) + ₹2 lakh (home loan interest) = ₹2.75 lakh of extra deductions. At 30%, that's roughly ₹85,000 saved in a single year (including cess). Run your own numbers with our Income Tax Calculator, and don't forget the Section 87A rebate if your income is within the limit.

Frequently Asked Questions

Can I save tax beyond the ₹1.5 lakh 80C limit?

Yes. Sections like 80D (health insurance), 80CCD(1B) (extra ₹50,000 for NPS), 24(b) (home loan interest up to ₹2 lakh) and 80E (education loan interest) all give deductions over and above 80C — mostly under the old tax regime.

How much can I claim for health insurance under 80D?

Up to ₹25,000 for yourself and family (₹50,000 if you're a senior citizen), plus an extra ₹25,000–₹50,000 for insuring your parents — so up to about ₹1 lakh in all.

Does the extra ₹50,000 NPS deduction work in the new regime?

No. The Section 80CCD(1B) deduction for your own NPS contribution is available only under the old regime. However, your employer's NPS contribution under 80CCD(2) is allowed in both regimes.

Which tax-saving deductions are allowed in the new regime?

Mainly the ₹75,000 standard deduction and your employer's NPS contribution (80CCD(2), up to 14% of salary), plus let-out home loan interest and the family pension deduction. The popular deductions — 80C, 80D, 80CCD(1B), 80TTB and HRA — are not allowed.

Can I claim home loan interest separately from 80C?

Yes. The principal repayment counts under 80C, while the interest is deducted separately under Section 24(b) — up to ₹2 lakh a year for a self-occupied home, under the old regime.

Disclaimer: This article is for educational purposes only and reflects rules for FY 2025-26 (AY 2026-27). Tax laws change and individual situations vary. Please verify the latest rules on the official Income Tax Department website or consult a qualified tax advisor before making decisions.