Don't rush to choose New Tax Regime, here's how you can save Rs 1 lakh+ under old system

Old Tax vs New Tax Regime: As the deadline for filing your Income Tax Return (ITR) approaches, many salaried and self-employed individuals are rushing to choose between the old and new tax regimes. The new regime, with its lower tax slabs, may seem attractive at first glance. But here’s the truth: you might be missing out on over Rs 1 lakh in deductions simply because you’re unaware of the lesser-known benefits available under the Old Tax Regime.

The Income Tax Act offers taxpayers a choice between two distinct tax regimes: the old and the new. The Old Tax Regime provides a range of exemptions and deductions, such as those under Section 80C for investments (like PPF, ELSS, life insurance premiums), Section 80D for health insurance, House Rent Allowance (HRA), Leave Travel Allowance (LTA), and interest on home loans (Section 24). These deductions can significantly reduce your taxable income.

In contrast, the New Tax Regime aims for simplicity by offering lower tax rates while largely doing away with most of these common deductions and exemptions. 

TaxBuddy, a prominent tax advisory platform, gave details about 8 uncommon, yet powerful tax deductions that can make a huge difference in your tax outgo:

1. Section 80GG – Rent deduction without HRA

Think you can't claim rent deduction because your salary doesn't include HRA? Think again. Section 80GG allows you to claim up to ₹60,000 a year if you're paying rent out of pocket. Just file Form 10BA and ensure you meet the conditions—this one’s a game-changer for freelancers and consultants.

2. Section 80CCD(1B) – Extra deduction for NPS contributions

Already maxed out your Rs 1.5L 80C limit with PF or ELSS? You can still save an additional ₹50,000 by contributing to the National Pension Scheme (NPS). Bonus: from April 2025, contributions made for your minor child also count!

3. Section 80G – donations

If you’ve donated to a registered charity or relief fund, you may be eligible for 50% or even 100% deduction, depending on the organisation. Just remember: payments above Rs 2,000 must be digital, and you’ll need the donor’s PAN to claim it in your ITR.

4. Section 80D – Preventive health check-ups

Most people only claim health insurance premiums, but did you know that Rs 5,000 out of your limit can be claimed for preventive health checkups? Even cash payments are allowed. Use this for your annual family diagnostics and save more.

5. Section 80DD/80DDB – Medical expenses for dependents

Caregiving for a disabled family member? You may be eligible for a deduction up to Rs 1,25,000 under Section 80DD. Additionally, Section 80DDB allows deductions for specified diseases like cancer, dementia, or Parkinson’s—up to Rs 1,00,000.

6. Joint home loan benefits

If you co-own a home with your spouse and are co-borrowers on the loan, both can claim Rs 2 lakh interest deduction and Rs 1.5 lakh principal deduction individually. That’s Rs 7 lakh in combined deductions, if used strategically!

7. Company-leased car

Got a car lease through your employer? You’re taxed only on a nominal perquisite value (Rs 1,800–Rs 2,400/month + Rs 900 for driver), while the EMI, fuel, and maintenance paid by your employer are not taxed at all. Huge win if you qualify.

8. Flexi Benefit Plan

Optimise your CTC with non-taxable perks like meal cards, fuel reimbursements, telecom bills, and even education benefits. These don’t show up as income but still increase your net take-home pay. 

Comparison of Tax Slab Rates – Old vs New Regime (FY 2024–25 & FY 2025–26)

Income Slabs (₹)	Old Regime (	Old Regime (60–80 yrs)	Old Regime (80+ yrs)	New Regime (FY 2024–25)	New Regime (FY 2025–26)
Up to ₹2.5 Lakhs	Nil	Nil	Nil	Nil	Nil
₹2.5L – ₹3L	5%	Nil	Nil	Nil	Nil
₹3L – ₹5L	5%	5%	Nil	5%	5%
₹5L – ₹6L	20%	20%	20%	5%	5%
₹6L – ₹7L	20%	20%	20%	5%	5%
₹7L – ₹7.5L	20%	20%	20%	10%	5%
₹7.5L – ₹9L	20%	20%	20%	10%	10%
₹9L – ₹10L	20%	20%	20%	10%	10%
₹10L – ₹12L	30%	30%	30%	15%	10%
₹12L – ₹15L	30%	30%	30%	20%	15%
Above ₹15L	30%	30%	30%	30%	30%

Source: ClearTax