New Delhi: In Budget 2025, the government made a big announcement by making the income up to Rs 12 lakh tax free under the new regime. The limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000. The government made no changes in the old tax regime.
In the old tax regime, there is zero tax on income up to Rs 4 lakh. Taxpayers get many types of exemptions available in the old tax regime, which help the individuals to save tax. Here are some investment options which can help you get some exemptions in the old tax regime.
Income Tax saving options in Old Tax Regime
- The National Pension Scheme (NPS) is considered one of the best saving options for retirement. Taxpayers opting for the old tax regime can save Rs 50,000 under Section 80CCD (1B) by investing in this scheme. At the same time, an additional deduction of Rs 1.5 lakh is available under 80C.
- Public Provident Fund (PPF): By investing in this scheme, taxpayers can avail exemption under 80C. In PPF, the interest amount and the amount received on maturity are also tax free.
- Unit Linked Insurance Plan (ULIP) scheme allows taxpayers to get the benefit of investment along with life insurance. There is a lock-in period of five years. In ULIP, tax exemption is available on the premium and there is no tax on the maturity amount.
- Fixed Deposit schemes provide taxpayers with the option to save tax by investing in tax saver fixed deposits (FD). FDs are traditional saving schemes and are free from stock market risk. Tax saver FD plans come with a lock-in period of five years and exemption of up to Rs 1.5 lakh is available under 80C.
- Senior Citizen Saving Scheme (SCSS) scheme provides an interest rate of 8.2 percent per annum on the investment amount. The benefit of tax deduction is available on investment amount up to Rs 30 lakh in this scheme.
- Sukanya Samriddhi Yojana, the most popular schemes for girl child, allows parents to avail tax exemption by investing in the name of their daughters. In this, tax exemption of up to Rs 1.5 lakh is available under 80C and its returns are also tax-free.
- Equity Linked Saving Scheme (ELSS) allows the investor to get a rebate of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. A person can start investing in this scheme with Rs 500. The lock-in period in ELSS is only three years.
- In her Budget 2025 speech Finance Minister Nirmala Sitharaman announced that people investing in NPS Vatsalya can avail tax exemption on annual contribution up to Rs 50,000 under Section 80CCD(1B) of Income Tax. Sitharaman expanded tax exemption for NPS Vatsalya and it includes sections 80CCD (1B), 12(B) and 80CCD (3). This exemption is more than the normal Rs 1.5 lakh under section 80C.
Budget 2025 offered tax-free income up to Rs 12 lakh (Rs 12.75 lakh for salaried individuals) in the new tax regime. The old regime remains unchanged, offering various tax-saving investment options like NPS, PPF, ULIPs, FDs, SCSS, Sukanya Samriddhi Yojana, and ELSS, allowing deductions under Section 80C and other sections. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
