INTRODUCTION
As of March 2026, salaried individuals in India enter the critical last phase of tax planning. Since the financial year ends on March 31, this period becomes crucial for finalizing investments and submitting proofs to employers. Therefore, timely action can help reduce excess tax deduction and improve cash flow.
Moreover, after the updates introduced in the Union Budget 2025-26, taxpayers now have better opportunities to optimize their tax liability under both regimes.
The New vs Old Tax Regime: What Should You Choose?
First of all, you must decide between the two available tax regimes, as this decision directly impacts your tax savings.
The New Tax Regime (Default Option)
The government has made the new regime more attractive, especially for middle-income earners.
- You can enjoy zero tax up to ₹12.75 lakh due to:
- ₹75,000 standard deduction
- Rebate under Section 87A up to ₹60,000
- Additionally, tax slabs are simplified:
- ₹0 – ₹4 lakh: Nil
- ₹4 – ₹8 lakh: 5%
- ₹8 – ₹12 lakh: 10%
As a result, individuals with moderate income and fewer deductions benefit the most.
The Old Tax Regime
On the other hand, the old regime suits individuals who actively invest and claim deductions.
- Standard deduction: ₹50,000
- Allows multiple deductions and exemptions
Therefore, if you pay high rent, have a home loan, or invest heavily, this option may work better.
Maximize Deductions Under the Old Regime
If you choose the old regime, you should fully utilize available deductions before March 31, 2026.
Section 80C – The ₹1.5 Lakh Opportunity
This is the most commonly used deduction. You can invest in:
- ELSS (high return potential with shortest lock-in)
- PPF (safe and tax-free)
- EPF (automatic salary contribution)
- Home loan principal repayment
- Children’s tuition fees
Hence, ensure you exhaust the ₹1.5 lakh limit to maximize savings.
Section 80D – Health Insurance
You can claim deductions for medical insurance:
- ₹25,000 for self and family
- ₹25,000 (or ₹50,000 for senior citizen parents)
- ₹5,000 for preventive health check-ups
Besides tax benefits, this also ensures financial protection.
Section 24(b) – Home Loan Interest
You can claim up to ₹2 lakh on interest paid for a self-occupied property.
Consequently, this becomes a major tax-saving tool for homeowners.
Benefits Available in Both Regimes
Even if you opt for the new regime, some benefits still apply.
National Pension System (NPS)
- Employer contribution (up to 14% of salary) is deductible under Section 80CCD(2)
- Additional ₹50,000 deduction under Section 80CCD(1B) (old regime only)
Therefore, NPS remains one of the smartest tax-saving tools.
Standard Deduction
- ₹75,000 under new regime
- ₹50,000 under old regime
This deduction reduces taxable income without any investment.
Important Deadlines for March 2026
You must act within the timeline to avoid last-minute issues:
- Final investment date: March 31, 2026
- Proof submission to employer: Usually early March
- Advance tax (last installment): March 15, 2026
Missing these deadlines may lead to higher TDS deductions.
Smart Tax Planning Checklist
To simplify your planning, follow this checklist:
- First, calculate your total income including bonuses
- Next, compare both tax regimes carefully
- Then, review your deductions under 80C and 80D
- After that, invest any remaining amount before deadline
- Finally, submit proofs to avoid excess tax deduction
Important tips
If your income falls between ₹13 lakh and ₹15 lakh, the new tax regime often provides better results due to higher rebate and standard deduction.
Conclusion
Tax planning requires timely decisions and a clear understanding of available options. By choosing the right regime, utilizing deductions effectively, and acting before deadlines, salaried individuals can significantly reduce their tax burden. A proactive approach not only saves tax but also strengthens overall financial planning.