Okay, let’s kick this off with a quick confession: Back in 2018, when my salary first crossed ₹6 lakh, I stared at my Form 16 like it was a horror movie script. “₹35,000 tax? On what I earn? That’s my entire Diwali budget gone!” I was clueless — paying full slab without a single deduction. Sound familiar?
If your salary is above ₹5 lakh in FY 2025-26 (that’s most of us middle-class folks now), you’re officially in the taxable zone. But here’s the good news: With Budget 2025’s tweaks, you can slash that bill by ₹20,000–₹1 lakh+ legally. No shady tricks, just smart plays under the Income Tax Act.
I’ve helped over 150 readers (and my own family) do this since 2017 — turning tax dread into “hey, that’s extra coffee money.” We’ll cover old vs new regime, top deductions, real examples, and a dead-simple checklist. By the end, you’ll have your plan ready. Let’s dive in like friends plotting a budget getaway.
Step 1: Old Regime vs New Regime – Pick Your Winner (Don’t Guess, Calculate!)
First big fork in the road: New regime is default now, but you can switch to old if deductions make it sweeter. New one’s simpler (fewer rules, lower rates), old’s loaded with perks (but more paperwork).
For salary >₹5 lakh, new regime shines if your deductions are low (<₹3 lakh total). Old wins if you rent, have home loans, or love investing.
Quick Comparison Table for ₹8 Lakh Salary (November 2025 Rules):
| Aspect | New Regime (Default) | Old Regime (Opt-In) |
|---|---|---|
| Tax Slabs | 0% up to ₹4L; 5% ₹4-8L; 10% ₹8-12L; 15% ₹12-16L; 20% ₹16-20L; 25% ₹20-24L; 30% >₹24L | 0% up to ₹2.5L; 5% ₹2.5-5L; 20% ₹5-10L; 30% >₹10L |
| Standard Deduction | ₹75,000 (salaried only) | ₹50,000 |
| Section 87A Rebate | Up to ₹60,000 (zero tax till ~₹12.75L) | Up to ₹12,500 (zero tax till ₹5L) |
| Key Deductions | Limited: Employer NPS (80CCD2 up to 14% salary), Standard Deduction | Full arsenal: 80C (₹1.5L), 80D (health), HRA, Home Loan, NPS extra ₹50K |
| Tax on ₹8L Salary | ~₹22,500 (after std ded + rebate) | ~₹1,12,500 (after std ded, no big investments) |
| Best For | Low deductions, hassle-free | High deductions (>₹3L total) |
My Pick? For my ₹9 lakh salary last year, new regime saved me ₹18,000 vs old (no big home loan yet). But if you’re renting in Mumbai? Old all the way — HRA alone could save ₹50,000+.
Test yours: Plug into the Income Tax calculator on their site. Takes 2 minutes.
Step 2: If New Regime Fits – These 3 Hacks Slash Your Bill (Even Above ₹5L)
New regime killed most deductions, but it’s not zero. Focus here if you’re keeping it simple.
- Grab the ₹75,000 Standard Deduction + ₹60,000 Rebate Magic Every salaried person gets ₹75,000 off automatically — drops your ₹8L salary to ₹7.25L taxable. Under Section 87A, if that’s ≤₹12L, rebate wipes tax to zero till ~₹12.75L. Real Story: My cousin (₹7.2L salary) switched last year — tax from ₹28,000 to ₹0. He used the savings for a family picnic. “Best ROI ever,” he joked.
- Employer NPS Boost (80CCD2 – Free Money!) If your boss contributes to NPS (up to 14% of basic salary in new regime), it’s 100% deductible. No cap! Example: Basic ₹40,000/month? Employer adds ₹56,000/year tax-free. For ₹10L salary, saves ₹16,800 (30% slab). Pro Tip from Me: Negotiate this in your next appraisal — I did, bumped my take-home by ₹4,000/month.
- 80G Donations (The Feel-Good Saver) Donate to PM CARES or charities? 50-100% deductible, even in new regime. ₹10,000 to 100% fund = full ₹10,000 off. Last Diwali, I gave ₹15,000 to an orphanage — saved ₹4,500 tax + warm fuzzies.
Quick Win Table for New Regime (₹10L Salary):
| Hack | Deduction Amount | Tax Saved (30% Slab) |
|---|---|---|
| Standard Deduction | ₹75,000 | ₹22,500 |
| 87A Rebate (if <₹12L) | Up to ₹60,000 | Full tax zeroed |
| Employer NPS | 10-14% salary | ₹15,000–₹25,000 |
| 80G Donation | ₹10,000–₹50,000 | ₹3,000–₹15,000 |
| Total Potential Save | ₹1.95L+ | ₹40,500+ |
Step 3: Old Regime Power Moves – Max Out These for Big Wins (Salary ₹5L+ Lovers)
Got rent, health bills, or investments? Old regime is your playground. Aim for ₹3-4L total deductions.
- Section 80C: The ₹1.5L Swiss Army Knife Invest in ELSS, PPF, EPF top-up, tuition fees, home loan principal. My go-to: ₹1L in ELSS (12-15% returns) + ₹50K PPF (safe 7.1%). Example: ₹7L salary? Max 80C drops taxable to ₹5.5L — tax from ₹45,000 to ₹15,000. Saved ₹30,000 last year; bought new sneakers guilt-free.
- 80D Health Insurance: Protect Family, Save Tax ₹25,000 for self/spouse/kids; extra ₹50,000 for senior parents. Total ₹75,000. I cover my folks (65+) — ₹40,000 premium = ₹12,000 saved. “Peace of mind + pocket money,” as my dad says.
- HRA Exemption: Renters’ Best Friend If you get HRA in salary + pay actual rent, claim least of: Actual HRA, Rent paid -10% salary, 50% salary (metro)/40% (non-metro). Bangalore Rental Hack: My friend pays ₹25,000/month rent on ₹8L salary — claims ₹2.5L HRA exemption. Tax down ₹75,000. (Keep receipts + landlord PAN!)
- Home Loan Duo: 80C Principal + 24(b) Interest Principal in 80C (₹1.5L cap); interest up to ₹2L (self-occupied). New flat last year? Saved ₹90,000 combined.
- Extra NPS ₹50K (80CCD1B) + Education Loan (80E) NPS beyond 80C: ₹50K more. Full interest on kid’s education loan (no cap, 8 years). Family Win: Helped my sister (₹6.5L salary) with her son’s loan — ₹35,000 interest = full deduction, zero tax hit.
Old Regime Savings Snapshot (₹10L Salary with ₹3L Deductions):
| Deduction | Max Amount | Tax Saved (30% Slab) |
|---|---|---|
| 80C Investments | ₹1.5L | ₹45,000 |
| 80D Health | ₹75,000 | ₹22,500 |
| HRA Exemption | ₹2-3L (varies) | ₹60,000–₹90,000 |
| Home Loan Interest | ₹2L | ₹60,000 |
| NPS Extra + 80E | ₹50K + Unlimited | ₹15,000+ |
| Total Potential | ₹6L+ | ₹2L+ |
Real-Life Example: From ₹8L Salary to ₹1.2L Tax Saved (What I Did for a Reader)
Meet Raj (Mumbai, ₹8.2L salary, renter). Old regime newbie.
- ₹1.5L 80C (ELSS + PPF)
- ₹30,000 80D (family policy)
- ₹2.4L HRA (₹20K rent/month)
- ₹20,000 NPS extra Total deductions: ₹4.2L. Taxable: ₹4L. After rebate? ₹0 tax. Saved ₹52,000 vs new regime. He messaged: “Ram, you’re my tax fairy godmother!”
For ₹15L+? Add 80G donations + structure salary for more allowances (LTA twice in 4 years).
Your 5-Minute Action Plan (Do This Before March 31, 2026)
- Crunch Numbers: Use Income Tax e-Filing Calculator — old vs new.
- Max 80C Now: Open PPF/ELSS today (lock-in starts).
- Gather Proofs: Rent receipts, insurance premiums, loan statements.
- Opt Regimes: New is auto; switch to old in ITR if better.
- Track AIS: Check Annual Information Statement on portal for mismatches.
One reader followed this — saved ₹68,000 on ₹12L salary. What’s your salary ballpark? Comment below; I’ll estimate your save.
More Tax Hacks on Quarterly News (Your One-Stop Shop)
- Section 80C Limit 2025-26: Max ₹2L Savings Guide
- Old vs New Tax Regime 2025-26: Which Wins for You?
- HRA Exemption Calculator + Tips for Renters
- NPS Tax Benefits: Extra ₹50K Hack Explained
Tax season doesn’t have to suck. With these moves, you’re not just saving money — you’re building wealth. Hit me up if stuck; we’ve got this!
Written & regularly updated by Ram Lodhi Finance Writer & Credit Specialist at Quarterly News Since 2017 I’ve been crunching tax numbers, claiming every deduction, and guiding everyday earners like you to keep more in your pocket. These aren’t textbook tips — they’re from my ITRs, family filings, and the “aha!” moments from readers who’ve saved lakhs.
Last updated: November 22, 2025 (fresh from Budget 2025 slabs & portal checks)
Sources (Real & Clickable – Verify Yourself)
- Income Tax India – Salaried Returns AY 2026-27
- ClearTax – Save Tax on Salary Above 5 Lakhs FY 2025-26
- HDFC Funds – 10 Ways to Save Tax FY 2025-26
- PolicyBazaar – Income Tax Above 5 Lakh Guide
- GoDigit – How to Save Income Tax FY 2025-26
- Bajaj Finserv – Tax Saving for Salaried Above 9 Lakh
Quick FAQ (Your Top Worries, Answered)
Q: Above ₹5L means I pay full 20-30%? A: Nope — slabs start low (5% from ₹2.5-5L old, ₹4-8L new). Deductions/rebates keep it tame.
Q: Can I switch regimes mid-year? A: No, but opt out anytime before ITR filing (July 31).
Q: Rent without HRA? Still save? A: Yes, Section 80GG — up to ₹5,000/month if no house owned.
Q: What’s the biggest save for ₹6-10L salary? A: New regime + rebate = often zero tax. Add NPS for extra.
Disclaimer This is straightforward guidance based on rules as of November 22, 2025. Tax math varies by your exact setup — always verify on the official portal and chat with a CA for your numbers. We’re here to inform, not advise. Save smart, live better!