What is the Best Investments to Reduce Taxable Income?

AS Posted by: Aarav Sharma
• 28 October, 2025
3 Reply

The best investment to reduce the taxable income is:   

  • Contributions to the PF and NPS: many of the salaried person contribute a few percentage points (12%) to their provident funds, and this contributed income in the PF is not counted as the taxable income under the new regime and old tax regime, a individual salaried person can contribute up to % of their income in a year to PF, and NPS, even this included in your cost-to-company, you are not have to pay tax on the contributed income. Similarly, an individual employer can contribute 14 of their income to the NPS (National Pension System) under Section 80CCD(2) with both the new tax regime and old tax regime, and this will not be taxable. 
  • Interest on home loan: Interest on the home loan is deductible under section 24(b) of the Income Tax Act under the new tax regime and the old tax regime, which results in your taxable income coming down and helps to lower the tax burden. However, the interest is treated separately, and the deduction depends on whether the property is let out or self-occupied. 
  • Buying life insurance plans: Buying a premium life insurance plan under Section 80C of the Income Tax Act allows deductions for premium life insurance policies. For the policies purchased after April 1, 2012, you can get a tax deduction for up to INR 1.5 lakh, and claim it under Section 80C if the annual plan is less than the sum of 10%. For the policies purchased before April 1, 2012, you can get a tax deduction under section 80C if the total annual payments are not more than 20% of the sum expected. 

Tags : investments to reduce taxable income

  • Gauri Saxena 02 October, 2025

    Given below are some of the points to plan your tax savings for the year: 

    • Check out the tax savings you have, like the children's tuition fees, home loan repayments, PF contributions, and insurance premiums. 
    • Analyze and see which is the best tax regime suitable for you. 
    • ELSS, PFs, NPS, and fixed deposits are some of the popular tax savings investments that you can choose according to your goals and risk potential. 
    • If the old tax regime is beneficial for you, then choose and go with the future investments, because according to the new ITR, the investments you have made will not help you to reduce any taxable income. 

  • Mihir Dutta 30 September, 2025

    Tell me some names of the best tax savings investment options?

    • S
      Savetaxs 01 October, 2025

      Here are some of the investment options that you can choose to reduce your taxable income.

       

      • Public Provident Fund (PPF) 
      • Senior Citizens Savings Scheme (SCSS)
      • National Pension System (NPS)
      • Sukanya Samriddhi Yojana (SSY) 

       

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