How High Earners Can Save Tax Beyond Section 80C?

2025-07-21

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If you're a high earner, you already understand that Section 80C, which has a limit of ₹1.5 lakh, hardly taps into your tax-saving potential. With the new e filing 2.0, a faster and smoother income tax filing process is in store for you. However, to actually maximise your tax liability, you need to dig deeper than the basics.

Here’s a simple, personalised guide for high-income professionals, outlining clear and legal ways to reduce taxes while staying well within the rules.

Key Takeaways

Section 80C is just the starting point, where high-income earners gain a few more tax-saving alternatives.
Selecting the appropriate income tax slab regime can make a big difference to your net liability.
E filing 2.0 makes it easy to claim deductions and exemptions online.
Investment in retirement schemes and life insurance can provide tax and financial advantages in the long run.
Knowledge about allowable deductions under various heads can help you save lakhs of rupees every year in taxes.

Opt for the Right Income Tax Slab Regime

The current system offers both the Old and New Tax Regimes. Your first key decision is selecting the income tax slab that best suits your financial situation.

Old Regime vs New Regime: Quick Snapshot

The table below will help you understand how selecting the right income tax slab calls for a close examination of your exemptions, deductions, and investments.

Feature	Old Regime	New Regime
Standard Deduction	Yes	Yes (from FY 2023-24)
Section 80C	Yes	No
Other Deductions (80D, HRA, etc.)	Yes	No
Tax Slabs	Higher	Lower

In case your deductions are over ₹3 lakh, the old regime can still be the best bet.

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Use Section 80D, 80DD, and 80DDB for Health-Based Deductions

Beyond Section 80C, health insurance related sections offer generous tax deductions.

Section 80D: With this, you can protect your dependents’ health while reducing your tax burden. Get a chance to claim up to ₹25,000 for your family and an extra ₹50,000 for your senior parents.
Section 80DD: Receive ₹75,000–₹1.25 lakh for maintenance of disabled dependents, including expenditure on medical treatment and rehabilitation, as long as the dependent does not claim tax relief in their own right.
Section 80DDB: Claim up to ₹1 lakh for treating named critical illnesses among senior citizens, such as cancer or kidney failure, with a certificate from a registered specialist.

Investing in a comprehensive health insurance policy from reliable companies such as Canara HSBC Life Insurance not only protects your family but also lowers your tax outgo.

Make the Most of HRA, LTA, and Home Loan Interest (Section 24B)

Housing-related expenditure can be utilised wisely to reduce your tax burden:

HRA (House Rent Allowance): Eligible if you reside in rented housing.
LTA (Leave Travel Allowance): Domestic travel; can be availed twice in 4 years.
Section 24(b): Home loan interests can help you get a tax deduction of ₹2 lakh.

If you have a property, take the twin advantage of investment and tax saving by availing home loans and HRA.

Secure Your Future with NPS (Section 80CCD) and Retirement Plans

High-income individuals tend to overlook the additional ₹50,000 deduction under Section 80CCD(1B) while investing in the National Pension System (NPS). Top this up with employer contributions under 80CCD(2) for higher savings.

Alternatively, you could consider long-term retirement schemes such as the Pension4Life Plan by Canara HSBC Life Insurance, which provides both investment appreciation and tax relief under Section 10(10D).

Leverage Capital Gains Exemptions (Sections 54, 54EC, 54F)

If you’re earning through the sale of assets like real estate or equity, capital gains tax can be a major concern. Here's how to save:

Section 54: Save tax on capital gains by investing the proceeds of the sale of your residential property in another dwelling within the stipulated time limits, accumulating wealth and gaining relief from taxation.
Section 54EC: Invest capital gains earned on the sale of property in notified instruments such as REC or NHAI within 6 months to save tax and effectively lower your overall tax burden.
Section 54F: Exclude capital gains from the sale of property such as shares or land if the entire sale proceeds are invested in a residential property within the given time period.

These measures are legal, pragmatic, and intended to promote long-term wealth accumulation.

Did You Know?

More than 93% of income tax returns were filed online in FY 2023–24 using e filing 2.0.

Source: The Economic Times.

File Returns Using e Filing 2.0 for a Smooth Experience

The new e filing 2.0 portal provides a faster, intuitive experience for ITR filing. High-income earners can make the best use of:

Auto-populated data (from Form 26AS, AIS)
Pre-filled deductions and capital gains
Real-time validation of bank details
Improved dashboard for pending actions and notices

The enhanced e filing 2.0 portal guarantees faster refunds, fewer mistakes, and total transparency, tax filing made easier and faster for the high-income taxpayer.

Make Use of Donations and Charity Deductions (Section 80G)

If charity is near to your heart, you can claim deductions on donations made to specified charities under Section 80G. Based on the institution, you can opt for 50% or 100% deduction with or without limitations.

Tip: Confirm the charity is registered under Section 80G and obtain the correct receipt to submit via e filing 2.0.

Invest in Tax-Free Bonds and Life Insurance Policies

While interest from tax-free bonds isn’t deductible, it remains fully exempt, making them ideal for high-income individuals seeking low-risk, tax-free returns. Similarly, we offer plans with:

Tax exemption on maturity (Section 10(10D))

Annual premium deduction (Section 80C)
Peace of mind with long-term protection and wealth building

Diversify with ULIPs for Market-Linked Growth + Tax Benefits

ULIPs (Unit Linked Insurance Plans) have the best of both worlds:

Market-linked returns
Tax-free maturity under Section 10(10D)
Deduction to premiums under 80C

ULIPs enable you to merge your financial aspirations with tax effectiveness, making them suitable for high-income earners who want to achieve long-term prosperity.

Use Loss Adjustments and Carry-Forwards Wisely

Capital losses on equity or property can be offset against gains in the same year or brought forward for a maximum of 8 years. This tactic involves:

Timely filing via e filing 2.0
Correct classification of short-term and long-term gains
Documentation of prior filings

Talk to your financial advisor to ensure you're getting the most out of this lesser-known tax-saving trick.

Conclusion: It’s Not About Avoiding Tax, But About Smarter Planning

Reducing your tax liability legally is all about taking initiative and staying organised. From selecting the proper income tax bracket to looking for deductions other than Section 80C, each choice plays a crucial part in maximising your savings. By fully leveraging tax-saving options such as health insurance, home loans, and retirement planning, you can cut down your taxable income substantially.

Sites like e filing 2.0 make it easy for you to do so, keeping your finances in order and making sure that your tax-saving measures are in sync with your long-term objectives. With keen planning and the use of proper tools, you can get hold of your tax scenario and build a secure financial future.

Glossary

e filing 2.0: The advanced income tax filing platform by the government of India for simpler and quicker ITR filing.
Income Tax Slab: The structure of tax rates against various ranges of income under the New and Old tax regimes.
Section 80C: A provision of the Income Tax Act for deduction up to ₹1.5 lakh for particular investments.
ULIP: Unit Linked Insurance Plan brings insurance together with equity/debt investment.
Section 10(10D): Tax-free maturity benefits from life insurance policies, subject to specific conditions.

FAQs

Legal ways to reduce tax beyond Section 80C include claiming deductions under Sections 80D (health insurance), 80E (education loan interest), and 24(b) (home loan interest). Investing in NPS (Section 80CCD) and using HRA benefits also helps.

Yes, with smart deductions under 80C, 80D, 80CCD(1B), and HRA. Combine with life insurance benefits for maximum tax relief and financial protection.

Plan ahead using all eligible deductions, exemptions, and invest in tax-saving instruments like ULIPs for all-round benefits.

Use HRA, 80C, 80D, NPS, and home loan interest. Also, choose tax-efficient life insurance plans to lower your tax while securing long-term wealth.

The new tax system provides lower rates but fewer exemptions, whereas the old system provides more deductions. Decide according to your deductions and tax-saving techniques to maximise savings.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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