As March 2025 draws near, the clock is ticking for anyone looking to make last-minute moves that could impact their tax return. While tax season often feels like a race against time, there are still several strategies you can implement to reduce your tax burden and maximize potential savings. So, whether you're a business owner, freelancer, or simply a taxpayer hoping to take advantage of available deductions, if tax planning has been overlooked so far, don’t worry- there are still several last-minute strategies to minimize tax liability effectively.

1. Home Loan Deductions

If you have a home loan, you can take advantage of multiple tax benefits under the old tax regime:

Principal Repayment (Section 80C): You can claim a deduction of up to Rs.1.5 lakh on the principal repayment of a home loan.

Interest Payment (Section 24(b)): Interest paid on a home loan qualifies for a deduction of up to Rs.2 lakh for a self-occupied property.

Additional Deduction for First-Time Homebuyers (Section 80EEA): If you are a first-time homebuyer and your home loan was sanctioned between 1st April 2019 and 31st March 2022, you can claim an additional deduction of Rs.1.5 lakh on home loan interest.

To maximize deductions under each of the mentioned sections, ensure that the loan payments are made before 31st March 2025.

2. Tax Benefits on Insurance Premiums

Insurance policies not only provide financial security but also offer significant tax-saving benefits. Under the old tax regime, life insurance premiums paid for policies covering yourself, your spouse, or your children qualify for deductions under Section 80C, up to a limit of Rs.1.5 lakh. Additionally, health insurance premiums paid for self, spouse, and children can be claimed under Section 80D for a deduction of up to Rs.25,000. If you are paying health insurance premiums for senior citizen parents, an additional deduction of Rs.50,000 is available.

While the new tax regime excludes the benefits under section 80C and 80D, the treatment for insurance claims, that is the payouts from a life insurance policy or health insurance, remains the same in both regimes.

3. Savings Schemes and Investments

Under the old tax regime, several government-backed savings schemes and tax-saving investments can help reduce your taxable income:

Employees' Provident Fund (EPF), Public Provident Fund (PPF), and National Savings Certificate (NSC) (Section 80C): Contributions to these schemes are eligible for tax deductions under Section 80C, up to Rs.1.5 lakh.

Equity Linked Savings Scheme (ELSS): ELSS is a tax-saving mutual fund with a lock-in period of three years, qualifying for a deduction under Section 80C.

National Pension System (NPS) (Section 80CCD(1B)): An additional deduction of Rs.50,000 is available for investments made in NPS over and above the Section 80C limit. This is an excellent option if you are looking for long-term retirement savings with tax benefits.

Though 80C deductions are not applicable in the new tax regime, if you are planning to follow the new regime, you can still claim deduction under Section 80CCD(1B) for NPS contributions.

4. Other Deductions & Last-Minute Strategies:

Beyond the commonly used deductions, here are some additional ways to save on taxes under the old regime:

Education Loan Interest (Section 80E): If you have an education loan, you can claim a deduction on the interest component without any upper limit. This benefit is available for loans taken for higher education for yourself, your spouse, or your children.

Charitable Donations (Section 80G): Donations made to specified charitable institutions and funds are eligible for deductions. Ensure that the donation is made to a registered organization and that you collect the receipt for tax filing.

Tax Harvesting: If you have investments in equities or mutual funds, you can use tax-loss harvesting to reduce your capital gains tax. Selling underperforming stocks or mutual fund units can offset capital gains, thereby reducing your overall tax liability.

5. Tax Benefits Under the New Tax Regime

While the old tax regime allows for multiple deductions, the new tax regime focuses on simplified tax slabs with fewer exemptions. Under the new regime, popular deductions such as Section 80C (investments in PPF, EPF, ELSS, etc.) and Section 80D (health insurance premiums) are not available. However, some benefits that remain are-

Standard Deduction: Salaried individuals and pensioners can claim a standard deduction, which has been increased from Rs.50,000 to Rs.75,000 in Budget 2024.

Employer’s Contribution to NPS (Section 80CCD(2)): Employer contributions to an employee’s NPS account qualify for a deduction. In Budget 2024, this limit was increased from 10% of salary to 14% for central government employees.

Family Pension Deduction (Section 57(iia)): The maximum deduction for family pension recipients has been raised from Rs.15,000 to Rs.25,000, providing additional relief to beneficiaries.

Whether through home loan benefits, insurance, savings schemes, or strategic tax planning, every deduction you claim helps reduce your taxable income and improves financial efficiency. 31st March 2025 is the final window to optimize your tax savings for the financial year. So, review your deductions and make eligible investments before the deadline. Taking action now will not only help in saving taxes but also in securing a strong financial future.

And after the tax filing, if you are looking to manage your finances more efficiently either for personal goals or business, HDB Financial Services offers tailored solutions, including Loan Against Property, to help meet financial goals with ease.