This guide explains the most important deductions and exemptions available to taxpayers in India in 2025 (FY 2024–25 / AY 2025–26), how to claim them step-by-step, required documents, and common pitfalls to avoid.

Quick orientation

• Old vs New tax regime: Many popular deductions (eg. most Section 80 benefits) are available under the old regime. The new regime offers lower slab rates but fewer deductions — check both before you file.
• Standard deduction & rebate changes (2025): there were key changes in 2025 (standard deduction availability and rebate thresholds) — confirm items below when planning. (See sources at the end.)

STEP 1 — Decide your tax regime (Old vs New)

1. List your expected deductions for the year (80C, 80D, home loan interest, HRA, etc.).
2. Compute approximate tax under both regimes (taxable income after deductions vs new-regime slabs).
3. Choose the regime that gives lower tax for your situation — you can switch each year subject to rules. If unsure, run quick comparisons with a calculator or ask your tax advisor.

STEP 2 — Know the cornerstone, standard deduction & rebate

Standard deduction: salaried taxpayers get a standard deduction (check current amount and whether the new regime allows it). Also check the Section 87A rebate thresholds for the year you’re filing — these change with the Budget. (Official FAQ and Budget doc confirm the 2025 changes listed in sources.)

STEP 3 — Table: Key Deductions & Exemptions (what, limit, notes, docs)

Notes: some deductions (eg. most 80C items, 24(b) home loan interest) are typically claimed under the old regime. The new regime in 2025 includes some changes — check the Budget/Income Tax FAQ to see which deductions remain available (key official FAQ listed below).

STEP 4 — Step-by-step: How to claim these deductions (practical)

1. Start early: compile receipts / account numbers through the year (mutual fund folios, PPF passbook, premium receipts).
2. Tell your employer (Form 12BB): submit proof of investments and HRA/rent details so TDS is deducted correctly during the year (reduces TDS and improves cashflow). Employers usually require these proofs annually.
3. Collect lender/insurer certificates: lender interest certificates, insurance premium receipts, NPS contribution slips, donation receipts with registration numbers.
4. Enter details in ITR: use the ITR utility (income tax e-filing) to fill schedules for deductions — schedule-wise fields exist (eg. Schedule VIA for certain deductions; house property schedule for 24(b)).
5. Attach supporting info when requested: the new ITR utility may ask for policy/folio numbers, landlord details, etc. Save scanned copies.
6. Submit & e-verify: file, e-verify via Aadhaar OTP / netbanking / DSC to complete filing.

STEP 5 — Documentation checklist (what to keep)

• Investment receipts & account numbers (PPF, ELSS, PPF passbook pages)
• Life insurance premium receipts, policy numbers
• Health insurance premium receipts, policy number & insurer name
• Loan interest certificate & principal repayment schedule from bank
• Rent receipts / lease agreement / landlord PAN (if required)
• Donation receipts with registration number for 80G
• Form 16, Form 26AS / AIS (Annual Information Statement)

STEP 6 — Common mistakes & how to avoid them

• Claiming a deduction without supporting documents — keep originals and scanned copies.
• Double-counting the same investment across sections (e.g., both 80C and elsewhere).
• Not submitting Form 12BB to employer — leads to higher TDS.
• Ignoring special-rate incomes (STCG/LTCG) that may not be eligible for certain rebates — understand exclusions.

STEP 7 — Small employer / freelancer tips

• Self-employed: claim deductions while filing ITR (there’s no Form 12BB route for reducing TDS).
• Freelancers/contractors: maintain invoices and bank transaction proofs to tie income & expenses.

Useful examples (how to think about deduction stacking)

1. Max out 80C (₹1.5L) first if you have long-term commitments (PPF/ELSS/EPF/principal repayment).
2. Top up NPS under 80CCD(1B) for an extra ₹50k benefit (if retirement saving is ok for you).
3. Buy or maintain adequate family health cover to utilize 80D limits (helps both protection and tax).
4. If you pay rent, estimate HRA exemption — sometimes it saves more than investing in 80C instruments.

FAQ — short answers

• Can I claim 80C + 80CCD(1B)? Yes — 80C aggregate limit is ₹1.5L, plus 80CCD(1B) allows an additional ₹50k (NPS), subject to rules. :contentReference[oaicite:6]{index=6}
• Is health insurance premium deductible? Yes — within limits (80D). Keep premium receipts and policy numbers. :contentReference[oaicite:7]{index=7}
• Is home loan interest deductible? Interest on self-occupied property is generally allowed up to ₹2L under Section 24(b) (subject to rules); check whether you’re filing old or new regime. :contentReference[oaicite:8]{index=8}
• Where do I enter these in ITR? Deductions go into Schedule VIA / specific schedules for house property / other sections when you use the e-filing utility.

Need-to-know legal / authoritative references

Check the official Income Tax Department FAQ and your Budget notes for authoritative confirmation of slab/rebate and standard deduction changes in 2025 — details and exact numeric thresholds are published by the government each Budget and in the Income Tax Department FAQs (links in sources below).

If you want, I can also:

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