How To Save Tax In India Without Investing in Tax Saving Schemes?

Choose the Right Tax Regime

Since Budget 2023, taxpayers can choose between:

• Old Tax Regime (allows deductions and exemptions)
• New Tax Regime (lower tax rates but no deductions)

If you don’t invest in tax-saving schemes, the New Regime is often better because it has lower tax rates and no need for tax planning.

Tax-free income up to ₹7 lakh under New Regime (due to ₹25,000 rebate under Section 87A)
No need to invest in PPF, ELSS, or LIC to save tax

No deductions for home loan, HRA, or medical expenses

If your income is below ₹7 lakh, choose the New Regime for zero tax without any investment.

Revised Income Tax Slabs for FY 2025-26 (AY 2026-27):

Standard Deduction: Increased to ₹75,000 for salaried individuals.

If your income is below ₹12 lakh, choose the New Regime for zero tax without any investment.
 

Claim HRA (House Rent Allowance) If You Are a Salaried Employee

Salaried employees who receive HRA as part of salary
Living in a rented house & paying rent above ₹5,000 per month

How is HRA Exemption Calculated?

HRA exemption = Minimum of the following:

1. Actual HRA received from employer
2. 50% of salary (for metro cities) or 40% of salary (for non-metro cities)
3. Rent paid - 10% of salary

If you don’t receive HRA but live in a rented house, claim a deduction under Section 80GG (up to ₹60,000 per year).
 

Use Standard Deduction of ₹50,000

The Standard Deduction is a flat ₹50,000 deduction available to:
Salaried employees
Pensioners

This deduction automatically reduces taxable income and does not require any investment.

Example:

• If your salary is ₹8 lakh, after the ₹50,000 standard deduction, your taxable income becomes ₹7.5 lakh.

No need to submit any proof
Available under both Old and New Tax Regimes

Reduce Tax with LTA (Leave Travel Allowance)

Salaried employees can claim LTA tax exemption on domestic travel expenses.

Conditions to Claim LTA:

• Available for self, spouse, children, and dependent parents/siblings
• Only domestic travel (within India) is allowed
• Claimable twice in four years

If your employer provides LTA as part of salary, submit travel bills to claim tax-free travel allowance.
 

Claim Medical Expense Deductions

A. Medical Insurance Premium (Section 80D)
Even if you haven’t invested in tax-saving schemes, you can reduce tax by claiming deductions on medical expenses:

• Self, spouse, children → Deduction up to ₹25,000
• Parents (below 60 years) → Additional ₹25,000
• Senior citizen parents → Additional ₹50,000

B. Preventive Health Check-up

You can claim up to ₹5,000 per year for preventive health check-ups (like full-body check-ups).

• No need for health insurance
• Medical tests for self, spouse, children, or parents are eligible

C. Medical Treatment for Specific Diseases (Section 80DDB)

If you or a family member suffer from specified diseases (cancer, kidney failure, etc.), claim a deduction up to:

• ₹40,000 (below 60 years)
• ₹1,00,000 (above 60 years)

Submit doctor’s prescription to claim this deduction.
 

Save Tax on Education Expenses

A. Tuition Fee Deduction (Section 80C)

Parents can claim a deduction of up to ₹1.5 lakh per year for tuition fees of two children under Section 80C.

• Only full-time school fees (nursery to college) are eligible
• No deduction for private coaching or tuition classes

B. Education Loan Interest Deduction (Section 80E)

If you are repaying an education loan, you can claim 100% deduction on the interest paid (for 8 years).

• Applicable for self, spouse, or children’s education
• Available for both domestic & foreign education
   

Claim Tax Deductions for Disabled Dependents

If you have a disabled dependent (spouse, child, parent, sibling), claim a flat deduction under Section 80DD:

• 40-80% disability → ₹75,000 deduction
• More than 80% disability → ₹1,25,000 deduction

You don’t need to spend money—just submit a disability certificate to claim the deduction.
 

Save Tax with Work-Related Allowances

A. Meal Coupons (Like Sodexo, Zeta)
Employers can give meal coupons worth ₹50 per meal (₹2,500 per month), which are tax-free.

B. Fuel & Travel Allowance
Employees can get tax-free allowances for:

• Fuel expenses (if they have a company vehicle)
• Travel reimbursements for work trips

If your company offers these perks, opt for them instead of taxable salary.
 

Avoid Paying Tax on Gifts (Section 56)

Gifts from relatives (parents, spouse, siblings) are 100% tax-free.

• Cash, property, shares, or gold received from relatives is tax-free
• Gifts from friends or distant relatives above ₹50,000 per year are taxable

If your family wants to help financially, ask them to gift money instead of transferring to your account (to avoid tax).
 

Conclusion

You don’t need to invest in PPF, ELSS, or LIC to save tax. With smart tax planning, you can legally reduce taxable income through:

1. Choosing the right tax regime
2. Using HRA & LTA exemptions
3. Claiming medical, tuition, and work-related deductions
4. Saving tax on gifts & allowances

By implementing these non-investment tax-saving strategies, Indian taxpayers can reduce tax burden while keeping their money liquid and accessible.

Disclaimer: Tax laws are subject to amendments. It is advisable to consult with a tax professional or refer to official government publications for personalized advice.