Want to Save ₹46,800 This Year? Use TaxBuddy’s Calculator
- Nimisha Panda
- Sep 19
- 8 min read
Tax planning is a crucial step for individuals and professionals looking to optimize their income tax liability. Utilizing available deductions under Sections 80C and 80D, along with other tax-saving provisions, can significantly reduce taxable income. Platforms like TaxBuddy simplify this process by providing accurate calculations, AI-powered recommendations, and guided filing. With the latest updates for FY 2024-25, it has become even more essential to understand how these deductions work, whether under the old or new tax regime, and how to maximize their benefits efficiently. This article breaks down key deductions, demonstrates how TaxBuddy’s tools help calculate savings, and guides users through seamless filing.
Table of Contents
How TaxBuddy’s Calculator Works
TaxBuddy’s calculator is designed to provide a real-time estimate of tax liability based on income, deductions, and exemptions. Users enter income details, investments, and eligible expenses, and the AI-powered system automatically applies relevant deductions under Sections 80C, 80D, 24(b), and others. It compares calculations under both the old and new tax regimes, highlighting which option is more beneficial. The calculator also flags potential errors or missing information, ensuring accuracy and helping users make informed decisions about tax-saving investments.
Section 80C Deductions and Tax Savings
Section 80C of the Income Tax Act is one of the most widely used provisions for reducing taxable income and optimizing tax savings. Under this section, taxpayers can claim deductions of up to ₹1.5 lakh in a financial year on specified investments and payments. The eligible instruments include contributions to the Employee Provident Fund (EPF), which is commonly used by salaried employees to build retirement savings, and the Public Provident Fund (PPF), a government-backed long-term savings scheme offering both tax benefits and interest income. Other qualifying investments include National Savings Certificates (NSC), which provide fixed returns, and Equity-Linked Saving Schemes (ELSS), which combine tax savings with potential market-linked growth. Life insurance premiums for self, spouse, or children also qualify for deduction under 80C, providing both financial protection and tax relief. Additionally, tuition fees paid for children’s education and principal repayment on home loans are eligible, encouraging both educational investment and home ownership. By planning contributions strategically across these instruments, taxpayers can effectively lower their taxable income, reduce their overall tax liability, and simultaneously build a diversified portfolio for long-term financial growth.
Section 80D Deductions and Health Benefits
Section 80D focuses on health-related financial planning by providing tax deductions for premiums paid towards health insurance. Taxpayers can claim deductions for insurance policies covering themselves, their spouse, children, and parents. For individuals below the age of 60, the maximum deduction allowed per financial year is ₹25,000, while senior citizens are eligible for a higher deduction of up to ₹50,000. Importantly, premiums paid for parents’ health insurance are also eligible for deductions, regardless of whether the parents are dependent on the taxpayer or not, allowing greater flexibility in planning family healthcare coverage. Utilizing Section 80D provides dual benefits: it reduces taxable income, directly lowering tax liability, and ensures financial security against medical emergencies, which can otherwise be a significant financial burden. Health insurance coverage under 80D not only safeguards the family’s health and financial well-being but also encourages proactive planning for unforeseen medical expenses. In combination with other tax-saving instruments, Section 80D plays a critical role in comprehensive financial planning, helping taxpayers balance tax efficiency with health and security for themselves and their dependents.
Other Tax-Saving Sections You Can Use
In addition to Sections 80C and 80D, taxpayers can explore other deductions to further reduce their tax burden. Section 24(b) allows interest paid on home loans to be claimed as a deduction up to ₹2 lakh annually for self-occupied property. Section 80E covers interest on education loans, while Section 80TTA allows interest from savings accounts up to ₹10,000 to be deducted. By leveraging these sections in combination, taxpayers can strategically optimize tax savings.
Is Section 80C Allowed in New Tax Regime?
Under the new tax regime, Section 80C deductions are not allowed. The new regime offers lower tax rates in exchange for forgoing most exemptions and deductions, including 80C. Taxpayers opting for the new regime need to calculate their tax liability without relying on these deductions and compare it against the old regime to ensure maximum benefits.
How Section 80C Works in the Old Tax Regime
Under the old tax regime, Section 80C provides one of the most significant opportunities for taxpayers to reduce their taxable income. Eligible taxpayers can claim deductions of up to ₹1.5 lakh in a financial year by investing in or making payments towards specified instruments. This deduction encompasses a wide range of financial activities, allowing individuals to combine multiple avenues to maximize their tax savings.
For instance, contributions to a Public Provident Fund (PPF) account are eligible for deduction, and the interest earned is also tax-free, making it both a tax-efficient and long-term investment option. Similarly, life insurance premiums paid for self, spouse, or children are deductible under Section 80C, providing both financial security and tax benefits. Education-related expenses, such as tuition fees paid for children’s schooling or higher education, are also included in the 80C limit. Additionally, principal repayments on home loans and investments in equity-linked savings schemes (ELSS) can be claimed, combining growth potential with tax reduction. By strategically utilizing these instruments together, taxpayers can optimize their taxable income, plan long-term savings, and benefit from a structured approach to wealth accumulation.
Benefits of TaxBuddy’s AI-Powered Mobile App
TaxBuddy’s mobile app is designed to simplify tax filing and planning by combining automation, AI-driven recommendations, and a guided filing experience. Users can easily import their Form 16, ensuring all salary, allowance, and TDS details are accurately captured. The app automatically pre-fills income sections, reducing manual entry errors and saving time.
One of the standout features is its ability to track eligible deductions and offer personalized recommendations to maximize tax savings. For example, based on the taxpayer’s profile, the app can suggest optimal allocation under Section 80C, 80D, 24(b), or other relevant sections to ensure the individual fully utilizes their benefits. TaxBuddy also provides timely alerts for upcoming filing deadlines, reminders for advance tax payments, and insights into potential refunds. The seamless e-filing feature enables users to submit their returns securely without technical complications. By leveraging AI, TaxBuddy helps taxpayers plan efficiently, reduces errors, ensures compliance, and makes the entire tax filing experience faster, smarter, and virtually hassle-free.
Step-by-Step Guidance for Maximizing Savings
The first step is to input your total income and investment details into TaxBuddy’s mobile app. This includes all sources of income such as salary, business or professional income, capital gains, rental income, and any other taxable earnings. Additionally, you should provide details of investments and expenses that qualify for deductions, such as contributions to Public Provident Fund (PPF), life insurance premiums, tuition fees, and health insurance payments. Entering accurate data ensures the AI-powered system can calculate your tax liability precisely.
Next, apply eligible deductions under Sections 80C, 80D, and other applicable sections. Section 80C covers investments like PPF, NSC, ELSS, and principal repayment of home loans, while Section 80D applies to health insurance premiums for yourself, spouse, children, and parents. Other sections, such as 80E for education loans or 24(b) for home loan interest, should also be included where relevant. TaxBuddy automatically identifies applicable deductions based on the details provided.
After adding all deductions, compare your tax liability under the old and new tax regimes. The system helps analyze which regime offers a lower tax outgo based on your income, deductions, and exemptions. This step ensures you make an informed choice and maximize tax savings.
If possible, adjust your investments or contributions to optimize deductions. For instance, increasing contributions to eligible savings schemes or making additional insurance payments before the end of the financial year can reduce your taxable income and further lower your tax liability.
Finally, review the summary provided by the AI-powered system for accuracy. TaxBuddy cross-verifies your inputs with relevant tax rules to highlight any discrepancies, missing deductions, or potential errors. Once confirmed, you can confidently proceed to file your ITR, ensuring all eligible deductions are claimed and your tax savings are maximized.
Expert-Assisted Filing with TaxBuddy
For those preferring professional guidance, TaxBuddy offers expert-assisted filing plans. Experienced chartered accountants review income, deductions, and tax calculations, ensuring compliance and reducing the risk of errors. This service is ideal for taxpayers with multiple income sources, investments, or complex financial scenarios, providing peace of mind and a seamless filing experience.
Conclusion
Maximizing tax savings under Sections 80C, 80D, and other provisions is essential for efficient financial planning. TaxBuddy’s AI-powered mobile app and expert-assisted services simplify this process, offering accuracy, personalized recommendations, and a smooth filing experience. For anyone looking to optimize their tax savings and file accurately, it is highly recommended to use the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy provides flexible filing options for all types of taxpayers. Users can choose self-filing, which offers a guided, step-by-step interface with pre-filled data, helping individuals file returns efficiently. For those who prefer professional assistance, expert-assisted plans allow qualified accountants to review and file ITR on behalf of the taxpayer, ensuring accuracy, compliance, and minimal errors. Both options aim to make tax filing seamless and convenient.
Q2. Which is the best site to file ITR? For secure and efficient ITR filing, platforms like TaxBuddy stand out. It provides a user-friendly interface, AI-driven guidance, and support for both simple and complex returns. The platform helps with automatic Form 16 import, TDS reconciliation, and deduction claims, reducing the chances of mistakes compared to manual filing or less advanced platforms.
Q3. Where to file an income tax return? ITR can be filed on the Income Tax Department e-filing portal, which is the official channel. Alternatively, platforms like TaxBuddy allow online filing using the same official system but with added automation, error checks, and guided workflows for easier submission and e-verification.
Q4. Can Section 80D deductions be claimed for senior citizen parents? Yes, taxpayers can claim Section 80D deductions for health insurance premiums paid for parents, including senior citizens. The deduction limit varies: ₹25,000 for non-senior citizen parents and ₹50,000 for senior citizen parents. TaxBuddy automatically calculates eligible deductions when the user inputs insurance details, ensuring maximum benefit.
Q5. How much deduction can be claimed under Section 80C? Under Section 80C, a maximum deduction of ₹1.5 lakh per financial year can be claimed. Eligible investments and expenses include PPF, NSC, ELSS, life insurance premiums, tuition fees, and principal repayment on home loans. TaxBuddy allows users to combine multiple investments under 80C and automatically tracks the total to ensure they do not exceed the limit.
Q6. Is Section 80C allowed in the new tax regime? No, the new tax regime offers lower tax rates in exchange for foregoing exemptions and deductions like 80C. To claim 80C, a taxpayer must opt for the old tax regime, where these deductions are fully available, and TaxBuddy provides a comparison tool to evaluate which regime offers maximum tax savings.
Q7. Can tuition fees for children be included under 80C? Yes, tuition fees paid for up to two children are eligible for deduction under Section 80C. TaxBuddy helps users enter tuition payments and automatically includes them in the total 80C deduction, reducing taxable income accurately.
Q8. Does TaxBuddy’s calculator compare old and new tax regimes? Yes, TaxBuddy features a tax calculator that compares liabilities under both old and new regimes. It helps taxpayers decide which option minimizes tax liability based on their income, exemptions, deductions, and investments, ensuring an informed decision before filing.
Q9. Can multiple 80C investments be combined to reach the limit? Absolutely. Investments such as PPF, NSC, ELSS, life insurance premiums, and tuition fees can be combined to reach the ₹1.5 lakh 80C limit. TaxBuddy automatically sums up all eligible investments entered, ensuring the total deduction claimed does not exceed the prescribed limit.
Q10. Does TaxBuddy support Form 16 import for easier filing? Yes, TaxBuddy allows Form 16 import, automatically capturing salary details, TDS deductions, and other relevant information. This feature reduces manual data entry, minimizes errors, and speeds up the ITR filing process.
Q11. Can interest on home loans be claimed along with 80C investments? Yes, taxpayers can claim principal repayment under Section 80C and interest paid under Section 24(b) separately. TaxBuddy guides users to input both components accurately, ensuring maximum deductions while remaining compliant with Income Tax rules.
Q12. How can I ensure my deductions are accurately claimed using TaxBuddy? TaxBuddy simplifies deduction claims with automated prompts, pre-filled forms, and validation checks. Users can enter investment details, premiums, and expenses, and the platform calculates eligible deductions, cross-verifies with TDS and AIS data, and ensures that no deduction is missed or incorrectly claimed, resulting in error-free filing.
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