How to maximise your income tax exemption through deductions and investments

09/07/25

Blog

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Making Tax Saving Interesting

Tax season often feels like a never-ending puzzle—so many numbers, so many rules. But what if we flipped the script and looked at it as an opportunity instead of a burden? Think of it as a game where every smart move helps you keep more of your hard-earned money.

The best part? Saving taxes does not just mean investing wisely—it can also mean making a real difference in someone’s life. By understanding income tax exemption rules, leveraging deductions, and taking advantage of 80G income tax benefits, you can grow your wealth while supporting a cause you care about. Let’s dive into some simple, practical, and rewarding ways to make tax-saving work for you. 

Smart Investments and Deductions

Who does not love a good discount? Whether it is a festive sale or a special offer at your favourite store, getting a price cut always feels great. Tax deductions work the same way—they help you legally reduce your taxable income so that you pay less tax and keep more of your hard-earned money.

Imagine buying a ₹1,000 product, but there’s a ₹200 discount. You only pay ₹800, right? Similarly, tax deductions lower your taxable income, so you owe less tax to the government. You can also make smart investments that not only save tax but also grow your wealth over time!

Here is how you can maximise your savings:

1. Invest in ELSS (Equity Linked Saving Scheme)

ELSS is one of the most efficient ways to save tax while building wealth. It falls under Section 80C, allowing deductions of up to ₹1.5 lakh. Unlike traditional tax-saving instruments, ELSS invests in equities, offering the potential for higher returns over time. It also has the shortest lock-in period among tax-saving options, making it an attractive choice for investors who seek both growth and liquidity.

2. Health Insurance (Section 80D)

Medical emergencies can be financially draining, but health insurance provides both protection and tax benefits. Under Section 80D, you can claim deductions for premiums paid for yourself, your family, and your parents. The exemption limit varies, offering higher deductions when insuring senior citizens. Investing in a good health policy ensures financial security while reducing your tax liability.

Read Also: Best Ways to Save Income Tax in India

3. Home Loan (Section 80C)

For homeowners, a home loan is a great way to save on tax. The principal repayment qualifies for Section 80C deductions, reducing taxable income, while interest payments offer additional benefits under Section 24(b). This dual benefit makes homeownership financially rewarding, as you build an asset while availing tax savings.

4. PPF (Public Provident Fund)

PPF is a long-term savings option offering both security and tax benefits. It falls under Section 80C, allowing deductions up to ₹1.5 lakh. The interest earned and the maturity amount are tax-free, making it an excellent tool for wealth creation with guaranteed returns. Its 15-year tenure encourages disciplined savings while ensuring financial growth.

5. NPS (National Pension Scheme)

NPS is designed for individuals looking to build a retirement corpus while enjoying tax benefits. It allows deductions under Section 80CCD(1) and 80CCD(1B), enabling additional savings beyond the standard 80C limit. It also provides flexibility in choosing investment options, balancing risk and reward for long-term wealth accumulation.

6. FDs & Bonds

Tax-saving fixed deposits (FDs) and bonds offer a secure way to grow savings while reducing taxable income. Fixed deposits with a five-year lock-in qualify under Section 80C, while government and infrastructure bonds offer further tax benefits. These investments are ideal for individuals seeking stability along with assured returns.

By combining tax deductions with smart investments, you can save money while building a financially secure future. Making informed financial decisions ensures that your earnings work for you, offering both immediate tax relief and long-term wealth growth.

Donate and Save (80G Income Tax)

Not many people realise that donating to a registered NGO can help reduce your taxable income. Under Section 80G, contributions made to eligible charitable organisations such as Bal Raksha Bharat (also known as Save the Children India) qualify for tax deductions. This means that while you support a cause you care about, you also lower the amount of tax you owe—a win-win situation!

When you donate to a registered child welfare NGO, a percentage of your contribution can be deducted from your taxable income. The deduction rate varies based on the NGO’s eligibility, with some allowing a 50% deduction and others qualifying for a 100% exemption. For instance, if you have a taxable income of ₹1,00,000 and donate ₹10,000 to an NGO that offers a 50% deduction, your taxable income is reduced to ₹95,000. This effectively lowers your tax liability while ensuring that your contribution is making a meaningful impact.

Think of it like cashback on your generosity—you give, and in return, you receive financial benefits in the form of tax savings. It is an effortless way to contribute to social welfare while optimising your financial planning. Whether it is supporting education, healthcare, or child welfare programmes, every rupee donated not only transforms lives but also brings you tangible benefits.

Easy Ways to Donate & Save on Taxes

Whether you prefer quick online donations or long-term commitments, there are plenty of hassle-free ways to contribute while reducing your taxable income.

• Online Donations: Most NGOs have secure websites where you can donate in minutes. Once you donate to NGO, you get a receipt to claim tax benefits under Section 80G—quick, easy, and rewarding.
• Payroll Giving: Some companies allow automatic salary deductions for donations. It’s hassle-free, ensures consistent support for a cause, and gives you tax savings without extra effort.
• Sponsor a Child’s Education: Instead of a one-time donation, you can cover a child’s school fees, books, or meals. This helps shape a child’s future while offering tax exemptions.
• Fundraising Platforms: Crowdfunding helps NGOs raise funds for education, healthcare, and welfare. Donations through verified platforms qualify for tax benefits, making giving back even more impactful.

How Bal Raksha Bharat is Changing Lives

At Bal Raksha Bharat, we are committed to ensuring that every child gets access to education, healthcare, and protection—the foundation for a better future. Through our programmes, we support children from marginalised communities, helping them achieve their dreams.

Your donation can provide a child with school books, nutritious meals, life-saving healthcare, and quality education. Every contribution, big or small, creates opportunities for children to thrive. The good news is that your generosity not only transforms lives but also qualifies for income tax exemption under Section 80G, allowing you to give back while enjoying financial benefits.

Anikait Suri