COURTKUTCHEHRY SPECIAL ON PERSONAL INCOME SMART TAXES SHAVING SCHEMES
How to Save Over ₹2 Lakh in Tax Beyond Section 80C
NPS Contributions Unlock Extra Deductions
Other Sections Offer Additional Relief
By Our Business Reporter
New Delhi: January 16, 2026:
Many taxpayers believe that once they use the ₹1.5 lakh deduction under Section 80C (through EPF, PPF, ELSS, LIC premiums, etc.), their tax-saving options are exhausted. However, the Income Tax Act provides several other avenues to reduce taxable income. By combining NPS contributions, employer benefits, health insurance, and housing-related deductions, individuals can save over ₹2 lakh more in taxes under the old tax regime.
Also Read: Madhya Pradesh High Court Slams Trial Court for Ignoring Deadline in Civil Case
Sub Head 1: NPS Contributions Unlock Extra Deductions
The National Pension System (NPS) is the most powerful tool beyond Section 80C:
- Section 80CCD(1B): Allows an additional ₹50,000 deduction for voluntary NPS contributions.
- Section 80CCD (2): Employer contributions to NPS (up to 10% of salary for private employees, 14% for government employees) are deductible without any upper cap under Section 80C.
- Together, these provisions can push total deductions well beyond the ₹1.5 lakh limit, making NPS a key instrument for salaried taxpayers.
Other Sections Offer Additional Relief
Beyond NPS, several other sections provide tax benefits:
- Section 24(b): Deduction of up to ₹2 lakh per year on home loan interest for self-occupied property. For let-out property, the entire interest is deductible (subject to set-off limits).
- Section 80D: Deduction for health insurance premiums – up to ₹25,000 for self/family and ₹50,000 for senior citizen parents.
- House Rent Allowance (HRA): Exemption available for salaried employees living in rented accommodation.
- Section 80E: Deduction for education loan interest with no upper limit.
By combining these, taxpayers can save well over ₹2 lakh in taxes, even after fully using Section 80C.
Also Read: Supreme Court Bars RWAs and Homebuyers’ Societies from Intervening in Builder Insolvency Cases
Practical Example
Suppose a salaried taxpayer has already exhausted ₹1.5 lakh under Section 80C. Additional savings could be:
- ₹50,000 under 80CCD(1B) (NPS voluntary contribution).
- Employer contribution to NPS under 80CCD (2) (say ₹60,000).
- ₹25,000 under 80D (health insurance).
- ₹2 lakh under 24(b) (home loan interest).
Total additional deductions = ₹3.35 lakh, far exceeding the Section 80C cap.
Conclusion
The belief that tax savings end at ₹1.5 lakh under Section 80C is a myth. By leveraging NPS, health insurance, housing benefits, and employer contributions, taxpayers can save over ₹2 lakh more. Strategic planning under the old tax regime ensures maximum deductions and long-term financial security.
Also Read: Justice G.R. Swaminathan: The Madras High Court Judge Whose Orders Sparked a National Debate
Suggested Keywords for SEO (Google + ChatGPT)
- Save tax beyond Section 80C India
- NPS tax benefits Section 80CCD(1B)
- Employer contribution NPS deduction 80CCD (2)
- Home loan interest deduction Section 24(b)
- Health insurance tax deduction Section 80D
- Tax planning old regime India 2026
- Additional tax savings beyond 80C limit
- Education loan interest deduction 80E
- HRA exemption tax benefits India
- How to save ₹2 lakh extra tax India
Also Read: Supreme Court: Disability Rights Must Be Core Part of CSR for True Workplace Equality