Tax-Saving Tips For FY26: What To Do In April To Avoid Higher TDS Later

The start of a new financial year in April is a great time to plan your taxes wisely. If you want to reduce your tax liability for the financial year, the important thing is to start early. Planning ahead would help you avoid last-minute decisions in March 2026 that might not suit your financial goals.

Before making any moves, you need to understand which tax regime suits you best — the old regime or the new one.

This regime allows you to claim a variety of deductions, including those under:

• Section 80C (up to Rs 1.5 lakh): This covers investments like Public Provident Fund, Life Insurance and Equity Linked Savings Schemes.

• Section 80D: This includes health insurance premiums.

• House rent allowance, leave travel allowance and more

Here are the various tax slabs under the old regime:

• Up to Rs 2,50,000: Nil

• Rs 2,50,001 to Rs 5,00,000: 5%

• Rs 5,00,001 to Rs 10,00,000: 20%

• Above Rs 10,00,000: 30%

This taxable income is then taxed according to the slabs. There is zero tax for income up to Rs 2.5 lakh, 5% for income between Rs 2.5 lakh to Rs 3 lakh, 5% for Rs 3 lakh to Rs 5 lakh, 20% from Rs 5 lakh to Rs 10 lakh and 30% for Rs 10 lakh and above.

This offers lower slab rates but does not permit most deductions or exemptions. It begins with no tax for income up to Rs 3 lakh and tops out at 30% for income above Rs 15 lakh.

Here are the tax slabs under the new regime:

• Up to Rs 4,00,000: Nil

• Rs 4,00,001 to Rs 8,00,000: 5%

• Rs 8,00,001 to Rs 12,00,000: 10%

• Rs 12,00,001 to Rs 16,00,000: 15%

• Rs 16,00,001 to Rs 20,00,000: 20%

• Rs 20,00,001 to Rs 24,00,000: 25%

• Above Rs 24,00,000: 30%

It's better to compare your potential tax outgo under both regimes before choosing one for the year.

If you opt for the old regime, start spreading out your investments from April rather than scrambling at the end of the financial year. Some reliable tax-saving tools include:

• PPF: Offers a safe, long-term investment with tax-free interest.

• Equity Linked Savings Scheme: Market-linked mutual funds with a three-year lock-in, potentially offering better returns.

• National Savings Certificate: Backed by the government, this gives guaranteed returns over five years.

• Life Insurance and EPF: Premiums and contributions are eligible for deduction under Section 80C.

• You can invest in a disciplined, monthly manner

• More time to understand the pros and cons of various schemes

• Avoid rushed and unsuitable investments made just to save tax at the last minute

Always choose options that align with your financial goals — whether that's retirement, buying a home or your child's education. Don't let the tax benefit be the sole driver of your investment decisions.

If you're unsure about which route to take, consulting a financial planner can make a significant difference. Professional advice tailored to your income and long-term plans ensures you don't miss out on potential savings.

Also, remember to file your ITR, even if you're not liable to pay tax. It acts as an official income record and is often required when applying for loans, visas, or even scholarships.

Tax planning isn't just about cutting down your dues, it's about managing your money wisely. By starting early, you stay in control, avoid unnecessary stress and make better choices that benefit you beyond just tax season.