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Guide to Income & Taxes

Old vs new regime, 80C, HRA, capital gains — what every Indian taxpayer actually needs to know.

Tax isn't about loopholes. It's about using the deductions the law has already written for you. Spend one hour understanding the basics and you'll save 5–15% of your income, every year, for the rest of your career.

⚖️Old regime vs new regime

Since FY 2023-24, the new regime is default. But that doesn't mean it's better for you.

  • Old regime — Higher slab rates, but you can claim 80C (₹1.5L), HRA, home-loan interest, NPS, medical insurance. Better if your deductions exceed ~₹3L.
  • New regime — Lower slab rates, no deductions except standard deduction (₹75k) and employer NPS. Better for renters with low investments.
  • How to choose — Add up your deductions for the year. If they exceed ₹3 lakh, old regime usually wins. If not, new regime is simpler and lower-tax.

💼Section 80C — your ₹1.5 lakh shelter

Old-regime only. Mix and match these to hit the ₹1.5 lakh cap.

  • EPF — Your salary's auto-contribution counts.
  • PPF — 7.1% tax-free, 15-year lock-in. Safe and steady.
  • ELSS mutual funds — 3-year lock-in, equity returns, fastest-growing 80C option.
  • Home-loan principal — Already paying? Already counts.
  • Term-insurance premium — Yes, your premium is deductible too.

📈Capital gains 101

Tax on profit from selling shares, mutual funds or property — and the rates changed in July 2024.

  • Equity short-term (< 1 year) — 20% flat tax on gains.
  • Equity long-term (> 1 year) — 12.5% on gains above ₹1.25 lakh per year.
  • Debt funds — Always taxed at your slab rate, no matter how long you hold.
  • Property — 12.5% LTCG without indexation, or 20% with indexation (only for property bought before July 2024).

Micro Pro Tips

  • 📅
    File by July 31 — Late filing fee is ₹5,000 — and you lose the right to carry forward losses.
  • 🏠
    Claim HRA even without rent receipts up to ₹3k/mo — Above that, get a signed receipt with the landlord's PAN if rent > ₹1 lakh/year.
  • 🧾
    Save Form 16 and 26AS — Cross-check what your employer reported against what the IT department sees. Mismatches cause notices.
🌟 Tax planning isn't a March activity. The earners who pay the least start in April and finish by December.