Save ₹1.5L and More with TaxBuddy’s Personalized Tax Plans
- PRITI SIRDESHMUKH
- Sep 24
- 8 min read
Updated: Sep 29
Maximizing tax savings is a key aspect of effective financial planning for every individual. With multiple sections under the Income Tax Act offering deductions and exemptions, taxpayers can significantly reduce their taxable income if they plan strategically. The Financial Year 2024–25 (Assessment Year 2025–26) introduces subtle changes and clarifications in deductions, especially under Sections 80C and 80D, while the new tax regime simplifies filing but removes several deductions. Understanding these provisions and leveraging them effectively can save taxpayers up to ₹1.5 lakh or more in legal tax benefits. Modern AI-driven platforms like TaxBuddy help taxpayers identify eligible deductions, calculate potential savings, and file returns seamlessly, ensuring compliance and maximising refunds.
Table of Contents
How TaxBuddy Helps Save ₹1.5 Lakh and More
TaxBuddy simplifies the tax-saving process by guiding users to utilize the full scope of allowable deductions. By analyzing income, investments, and expenses, the platform recommends the most beneficial combination of deductions, ensuring taxpayers claim the maximum limit permitted under the law. For instance, it identifies eligible Section 80C investments, health insurance premiums, and other eligible expenses while also comparing old versus new tax regime benefits. Using TaxBuddy not only reduces taxable income legally but also automates calculations, ensuring error-free filing and reducing the risk of notices or mismatches. The result is substantial tax savings without compromising compliance or accuracy.
Using Section 80C Investments for Maximum Tax Savings
Section 80C of the Income Tax Act remains one of the most effective and widely utilized provisions for reducing taxable income. It allows taxpayers to claim deductions on a variety of investments and payments, helping to lower the overall tax liability while simultaneously encouraging long-term financial planning. Eligible investments under this section include contributions to the Employee Provident Fund (EPF), which builds a retirement corpus over time; deposits in the Public Provident Fund (PPF), which offer tax-free returns and government-backed security; premiums paid for life insurance policies, which provide both protection and tax benefits; National Savings Certificates (NSC), which are safe fixed-income instruments; and Equity-Linked Savings Schemes (ELSS), which offer the dual advantage of potential market-linked growth and tax deduction. Additionally, repayments of the principal portion of a home loan also qualify under Section 80C, allowing homeowners to reduce taxable income while building home equity.
TaxBuddy assists taxpayers in managing these investments effectively by tracking contributions, calculating their cumulative impact, and recommending the optimal mix of eligible instruments. This ensures that the total deduction claimed does not exceed the statutory limit of ₹1.5 lakh while aligning with individual financial goals. By providing a clear, structured roadmap, TaxBuddy helps taxpayers maximize their deductions, avoid overlooking any eligible investment, and achieve substantial tax savings legally and efficiently.
Is Health Insurance Deduction Allowed in New Tax Regime?
The new tax regime, effective from FY 2020-21 onwards, offers lower tax rates but eliminates most deductions, including Section 80C and 80D. Health insurance premiums under Section 80D, which cover self, family, and dependent parents, are not allowed in the new tax regime. Taxpayers who prioritize deductions like health insurance may find the old regime more beneficial. TaxBuddy’s platform helps users assess whether staying in the new regime or switching to the old regime maximizes their tax savings based on individual circumstances, including insurance coverage, investments, and income levels.
How 80D Works in the Old Regime
Under the old tax regime, Section 80D allows deductions for premiums paid towards health insurance policies. Individuals can claim up to ₹25,000 for self, spouse, and children, with an additional ₹25,000 for insuring parents. Senior citizen parents can increase the limit to ₹50,000. Preventive health check-ups up to ₹5,000 per year are also included in the deduction. TaxBuddy helps users calculate these limits automatically, ensuring they utilize the full allowance. By integrating existing policies, premium payments, and family coverage, TaxBuddy simplifies the claiming process and ensures maximum legal savings.
NPS, Home Loan Interest, and Other Legal Deductions
Beyond Sections 80C and 80D, several other provisions offer significant tax-saving opportunities. Contributions to the National Pension Scheme (NPS) under Section 80CCD(1B) allow an additional ₹50,000 deduction, while home loan interest qualifies under Section 24(b), reducing taxable income by up to ₹2 lakh for self-occupied property. Other sections, such as 80E (education loan interest) and 80G (charitable donations), also provide legal avenues for reducing tax liability. TaxBuddy aggregates all eligible deductions, calculates their impact, and ensures they are correctly reflected in the ITR, helping taxpayers claim every legal benefit without confusion.
Choosing Between Old vs. New Tax Regime for 2025-26
Choosing the right tax regime for the Financial Year 2025-26 can have a significant impact on your overall tax liability and savings. Taxpayers have the option to choose between the old tax regime and the new tax regime, each with its own benefits and limitations. The new tax regime provides lower tax slab rates, which can reduce the overall tax burden for individuals with straightforward income structures. However, it removes most of the deductions and exemptions available under the old regime, including popular ones such as Section 80C investments, health insurance premiums under Section 80D, and home loan interest deductions.
On the other hand, the old tax regime allows taxpayers to retain these exemptions and deductions, making it more beneficial for those with significant eligible investments, expenses, or loans. Determining which regime is optimal requires a careful comparison of the tax payable under both systems, considering all deductions, exemptions, and income sources. TaxBuddy simplifies this process by analyzing a taxpayer’s income, investments, and eligible deductions to recommend the regime that results in the lowest overall tax liability. This ensures a precise, data-driven decision that maximizes tax savings while remaining fully compliant with tax laws, preventing missed benefits and potential filing errors.
AI-Driven Automation and Compliance with TaxBuddy
TaxBuddy’s AI-driven platform streamlines tax filing by automatically calculating eligible deductions, flagging missing information, and generating pre-filled returns. The system ensures compliance with current regulations while preventing common errors that could delay refunds. AI automation reduces manual calculations, eliminates guesswork, and provides real-time suggestions for optimizing deductions. By guiding users step by step, TaxBuddy ensures that taxpayers can file returns quickly, accurately, and with confidence.
Personalized Tax Plans: Tailored Savings Strategies
Each taxpayer’s financial situation is unique. TaxBuddy personalizes tax-saving strategies by analyzing income sources, existing investments, family coverage, and expenditure patterns. It recommends the most effective combination of Section 80C investments, health insurance, NPS contributions, and other eligible deductions. Personalized tax plans also incorporate regime comparison, helping users select either the old or new regime based on potential savings. The result is a tailored, actionable strategy to reduce taxable income while ensuring compliance.
Practical Tips for Claiming Deductions Using TaxBuddy
Maximizing your eligible deductions using TaxBuddy begins with uploading all relevant financial information to the platform. This includes details of investments such as provident fund contributions, life insurance premiums, mutual fund investments, and home loan repayments, as well as medical insurance payments and education loans. TaxBuddy automatically analyzes these inputs and identifies applicable deductions under various sections, ensuring that no eligible amount is overlooked.
Once the data is uploaded, review the suggested allocation of deductions under Section 80C, 80D, and other relevant sections. TaxBuddy provides an organized view of these allocations, allowing taxpayers to verify that they are utilizing the full limits available to them. The platform also evaluates whether claiming deductions under the old tax regime or opting for the new tax regime would result in higher tax savings, offering personalized recommendations tailored to the taxpayer’s income and investment profile.
It is essential to ensure that all supporting documents, such as investment proofs, insurance receipts, and loan statements, are correctly recorded within the platform. TaxBuddy’s system maintains these records securely and provides alerts if any documents are missing or need updating.
Finally, make use of TaxBuddy’s automated reminders and notifications to stay aware of deadlines for claiming deductions or filing returns. These features help prevent missed opportunities and errors, allowing taxpayers to optimize their deductions efficiently. By following these practical steps, individuals can maximize their eligible deductions, reduce taxable income, and ensure an accurate, hassle-free filing experience.
Conclusion
Effective tax planning requires a combination of knowledge, strategy, and compliance. Using Sections 80C, 80D, NPS contributions, and other legal deductions can significantly reduce taxable income. Platforms like TaxBuddy simplify this process with AI-driven analysis, personalized tax plans, and automated filing tools. For anyone looking to optimize their tax savings and ensure accurate filing, it is highly recommended to download 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 flexibility by offering both self-filing (DIY) and expert-assisted plans. Users comfortable preparing their own returns can use the self-filing option, guided step by step through pre-filled forms, utilities, and JSON file uploads. For those who prefer professional support, expert-assisted plans ensure a tax professional reviews the return, verifies all calculations, and manages complex situations like multiple income sources, audits, or deductions.
Q2. Which is the best site to file ITR?
TaxBuddy is a secure, reliable, and user-friendly platform for online ITR filing. Its AI-driven interface automates tax calculations, verifies data accuracy, and allows seamless Form 16 or JSON uploads. With real-time alerts, guidance for old vs. new tax regime, and error-free filing, TaxBuddy ensures a smooth filing experience compared to generic portals.
Q3. Where to file an income tax return?
Income Tax Returns can be filed directly on TaxBuddy’s web platform or mobile app. The platform supports ITR utilities, pre-filled JSON files, or manual entry, making it convenient for both individuals and businesses. TaxBuddy also provides guidance for selecting the correct ITR form based on income type and eligibility.
Q4. Can TaxBuddy help optimize deductions under Section 80C and 80D?
Yes. TaxBuddy automatically identifies eligible investments and expenses under Section 80C (like PPF, ELSS, LIC premiums) and Section 80D (health insurance premiums). It calculates the maximum allowable deductions, ensuring taxpayers claim full benefits and reduce taxable income efficiently.
Q5. Is it better to choose the old or new tax regime for maximum tax savings?
TaxBuddy allows users to compare the old and new tax regimes. By analyzing your income, deductions, and exemptions, it shows which regime offers lower tax liability. This feature ensures informed decisions to maximize tax savings while complying with FY 2024–25 regulations.
Q6. How does TaxBuddy handle NPS and home loan interest deductions?
TaxBuddy automatically considers contributions to the National Pension System (NPS) under Section 80CCD and home loan interest under Section 24(b) or Section 80C for principal repayment. It calculates eligible deductions, integrates them into your ITR, and ensures accurate filing without manual effort.
Q7. Can TaxBuddy calculate potential savings automatically based on investments?
Yes. TaxBuddy evaluates your eligible investments, insurance, and expenses to calculate potential tax savings. It provides an overview of the estimated reduction in taxable income, helping users plan finances efficiently before filing their ITR.
Q8. Are health insurance premiums included in the new tax regime deductions?
In the new tax regime, standard deductions and specific exemptions like health insurance premiums under Section 80D are not available. TaxBuddy guides users accordingly, highlighting which deductions are allowed and recommending planning strategies to minimize tax liability.
Q9. Does TaxBuddy provide alerts for missing documents or incomplete entries?
TaxBuddy actively monitors entries during ITR preparation and flags missing documents or incomplete information. Alerts for Form 16, TDS statements, or bank interest details ensure that users submit complete returns, reducing errors and avoiding notices from the Income Tax Department.
Q10. How quickly can I file my ITR using TaxBuddy?
Filing an ITR with TaxBuddy is designed to be quick and efficient. Once all documents are uploaded, the guided interface allows users to complete filing in minutes. Early preparation, automatic pre-filled forms, and integrated deductions reduce time compared to manual filing processes.
Q11. Can TaxBuddy generate personalized tax-saving strategies?
Yes. TaxBuddy analyzes your income, investments, and expenses to provide customized tax-saving recommendations. It identifies applicable sections, suggests optimal investment options, and highlights opportunities to reduce tax liability while ensuring compliance with current laws.
Q12. Does TaxBuddy ensure compliance with FY 2024–25 rules and deadlines?
Absolutely. TaxBuddy is updated with all FY 2024–25 ITR forms, deductions, exemptions, and filing deadlines. It provides reminders, ensures calculations are accurate, and automatically applies new rules for TDS, NPS, home loans, and other deductions, ensuring your return is compliant and error-free.
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