Legal Tax Saving, Advance Tax and Year-Round Tax Planning

Tax planning is the lawful arrangement of your income, investments and payments so that you pay no more tax than the law requires, claim every deduction and relief you are entitled to, and avoid interest for late payment. It is different from tax evasion, which is illegal, and from artificial schemes that the law can disregard. IMAK Advisory, an ICAI-registered CA firm in Bengaluru, helps salaried people, NRIs, professionals and businesses across India plan their taxes for the year ahead.

Good planning happens in April, not in March. By the time most people look at their deductions, the choice of regime has been made with the employer, advance tax instalments have been missed and investments are bought in a hurry. This page explains how to choose between the old and new regimes, how Section 80C and Section 80CCD(1) work, how to save tax on foreign income in India legally, how advance tax is planned, what changes under the Income-tax Act, 2025, and what our role does and does not cover.

• Old or new regime comparison with your actual numbers
• Deductions under Section 80C, 80CCD(1), 80CCD(1B), 80CCD(2), 80D and others
• Foreign income, residential status and treaty relief
• Advance tax estimates and instalment reminders
• Capital gains planning for shares, mutual funds and property
• Planning for professionals and business owners under presumptive and regular schemes

The law allows you to choose between options it offers – a regime, a deduction, a holding period, the timing of a sale. Using those choices well is planning. Hiding income or inventing expenses is evasion. In between sit arrangements with no real commercial purpose other than a benefit, which the General Anti-Avoidance Rule (GAAR) allows the department to disregard.

The choice of regime decides which deductions matter. Under the new regime, most deductions disappear, but slab rates are lower and the rebate covers income up to ₹12 lakh. Under the old regime, deductions such as 80C, 80D, house rent allowance and home loan interest remain.

How to Decide

• Add up the deductions you will actually claim under the old regime: 80C, 80D, HRA, home loan interest and others
• Compare the liability under both regimes using your expected salary and other income
• Remember that employer NPS contribution under Section 80CCD(2) is allowed in both regimes
• If you have business or professional income, switching between regimes is restricted, and choosing the old regime needs Form 10-IEA before the due date
• If you have only salary and other non-business income, you can choose each year in a return filed by the due date

Tell your employer your choice at the start of the year so that TDS is deducted correctly. A wrong declaration means either a refund to chase or tax to pay at the end.

1. Collect the basics: last year's return, Form 16 or income statements, salary structure, investments and loans.
2. Project the year: expected salary, business income, interest, rent and capital gains.
3. Compare both regimes with these numbers and recommend one.
4. List the deductions you already have and the room left under each limit.
5. Check residential status and foreign income where relevant.
6. Set advance tax estimates for each instalment date.
7. Review at mid-year and again before 31 March, when income or plans change.

Tax planning done this way is a short written plan for the year, not a product list. You decide what to do with it; we show the tax effect of each option.

Section 80C allows a deduction of up to ₹1.5 lakh a year from total income for specified investments and payments, under the old regime only. From tax year 2026-27, the same deduction sits in Section 123 of the Income-tax Act, 2025, with the eligible items listed in Schedule XV. The limit has not changed.

The most common 80C mistake is buying a product only for the deduction. Count what is already covered – provident fund, tuition fees, home loan principal – before investing anything new; many salaried people reach the limit without any extra purchase.

Section 80C Under the New Regime

Under the new regime, 80C is not available. If your 80C, 80D and housing claims are small, the new regime is often better even without them. This is why the regime decision comes before any investment decision.

Contributions to the National Pension System (NPS) can be claimed under three separate parts of Section 80CCD. They are often confused, so it helps to see them side by side.

In simple terms, Section 80CCD(1) does not give anything beyond the ₹1.5 lakh you already have under 80C – it is one more way to use the same limit. The extra benefit comes from 80CCD(1B), which allows another ₹50,000. If your employer offers NPS through payroll, an 80CCD(2) contribution can reduce tax even under the new regime, because it is one of the few deductions the new regime keeps.

Before You Choose NPS for Tax

• NPS money is locked until retirement, with limited partial withdrawals
• At retirement, part of the corpus must buy an annuity, and the annuity income is taxable
• The tax saving under 80CCD(1) disappears if you are already using the full 80C limit
• Restructuring salary to add employer NPS is a payroll decision your employer must agree to

From tax year 2026-27, the NPS deductions continue under the Income-tax Act, 2025 with new section numbers. We map them for each client so that declarations to employers use the correct references.

Keep proofs from the start of the year. Employers ask for them in January, and missing proofs turn a planned saving into a refund claim.

For employees, much of the tax planning happens through the salary structure agreed with the employer. Under the old regime, house rent allowance, leave travel allowance and certain reimbursements reduce taxable salary when the conditions are met and proofs are given. Under the new regime, most of these exemptions do not apply, but the standard deduction and the employer's NPS contribution do.

• Ask whether your employer offers NPS through payroll; the employer's share can be deducted under either regime
• If you pay rent and choose the old regime, keep the rent agreement and receipts, and the landlord's PAN where the law requires it
• Leave travel allowance covers travel within India, for a limited number of journeys in a block of years
• Flexible benefit plans differ by employer – check which components are actually tax-free under your chosen regime

Salary restructuring is a conversation with HR, not a form you fill alone. We prepare the numbers so that the discussion is about real savings.

Rental income is taxed after a standard deduction of 30% of the net annual value for repairs and upkeep, whatever you actually spend, and after interest on a loan taken for the property. Tax planning for property owners usually looks at three points:

• Ownership: rent is taxed in the hands of the legal owner, so joint ownership splits the income – subject to clubbing rules for gifts between spouses
• Loans: interest on a let-out property is deductible against rent under both regimes, but losses from house property cannot be set off against salary under the new regime
• Self-occupied home: interest on a home loan for a self-occupied house is deductible only under the old regime, within the limit

If you have both a self-occupied and a let-out property, the regime comparison changes significantly; we run it with both properties included.

The question of how to save tax on foreign income in India starts with one fact: your residential status decides whether that income is taxable in India at all. Planning foreign income is about getting the status right, using the relief the law gives for tax paid abroad, and reporting correctly – not about keeping the income out of sight.

Residential Status Decides What Is Taxable

Special rules apply to Indian citizens and persons of Indian origin: the 60-day test is replaced by 120 days for visitors with Indian income above ₹15 lakh, and a citizen with Indian income above ₹15 lakh who is not taxed in any other country can be treated as resident. Returning NRIs often qualify as RNOR for a period, which keeps most foreign income outside Indian tax during that time.

Legal Ways to Reduce Double Tax on Foreign Income

• Check your status for each year from passport travel dates before deciding where income is taxed
• Plan the year of return to India: the timing of a move can decide whether you are ROR, RNOR or NRI for a year
• Claim foreign tax credit for tax paid abroad on the same income, under the tax treaty (DTAA) or under unilateral relief where there is no treaty
• File Form 67 with the proof of foreign tax before filing the return, or at least within the assessment year, to support the credit
• Use the treaty's tie-breaker rules where both countries treat you as resident
• Check which income the treaty lets only one country tax, such as some pensions or government salaries
• Report foreign assets in Schedule FA every year as a resident, even when they earn nothing

Foreign tax credit is limited to the Indian tax on the same income, so if the foreign rate was higher, the excess is not refunded in India. For FY 2025-26 income the supporting form is Form 67; under the Income-tax Rules, 2026 the form may carry a new number for later years, which we confirm before filing.

What Does Not Work

• Keeping foreign income or accounts out of the return – residents must report foreign assets, and non-disclosure can attract heavy penalties under the black money law
• Routing income through relatives or companies without a real business reason
• Assuming income is tax-free in India because it was taxed abroad
• Claiming NRI status without counting days carefully

If your expected liability for the year, after TDS, is ₹10,000 or more, you must pay it in advance in instalments. Missing an instalment does not stop you paying later, but interest applies for the shortfall.

• Resident senior citizens without business or professional income do not need to pay advance tax
• Businesses and professionals under the presumptive schemes can pay the whole amount by 15 March
• Capital gains or lottery income arising during the year can be covered in the instalments that follow
• Salaried people with large interest, rent or capital gains should check whether TDS covers the full liability

We prepare an estimate before each instalment date, based on actual income to date and expected income for the rest of the year, so that payments are neither too low nor needlessly high.

Gains on shares, mutual funds, gold and property are often the largest planning opportunity for investors, because the timing and holding period change the rate.

• Listed equity shares and equity funds: gains on units held more than 12 months are long-term and taxed at 12.5% above an annual exemption of ₹1.25 lakh; short-term gains are taxed at 20%
• Using the annual exemption each year by selling and rebuying is legal, but consider transaction costs and timing
• Long-term gains on property can be exempt if reinvested in a residential house or specified bonds within the time limits
• For property bought before 23 July 2024, individuals and HUFs can compare the rate with and without indexation
• Losses can be set off against gains and carried forward only if the return is filed by the due date

• Presumptive schemes: small businesses and professionals can declare income at a fixed percentage of turnover or receipts, within the limits for their category, and avoid detailed books – but must then follow the scheme's conditions
• Choice of entity: proprietorship, LLP or company changes the rate, the way profits reach the owner and the compliance load
• Salary and dividend from your own company: each is taxed differently for the company and for you
• Payments to micro and small enterprises: amounts due must be paid within the time allowed under the MSME law, or the expense is not allowed in that year
• Depreciation, timing of asset purchases and provisions for expenses
• Corporate tax option: domestic companies can opt for a lower rate by giving up certain deductions

From tax year 2026-27, tax planning follows the Income-tax Act, 2025. The concepts stay largely the same, but the references change: Section 80C becomes Section 123, eligible items move to Schedule XV, and the other deductions are reorganised into a single chapter with new numbers. The term "tax year" replaces the pair of "previous year" and "assessment year". Declarations you give to employers, banks and payers for FY 2026-27 should use the new references, while the return for FY 2025-26 still uses the 1961 Act.

We do not publish fees. Our team shares the exact total after reviewing your income and requirements. The main factors are:

• Number and type of income sources
• Whether foreign income, foreign assets or residency questions are involved
• Capital gains volume and property transactions
• Business or professional income and the entity structure
• Whether advance tax estimates are needed every quarter
• Whether return filing is included

Taxes and interest are paid by you directly to the government and are separate from our professional fees.

A Salaried Couple Deciding Between Regimes

A couple with salaries in the ₹20 lakh range had a home loan, children's tuition fees and health insurance for parents. Comparing both regimes with real numbers showed the old regime suited one spouse and the new regime suited the other. One added an 80CCD(1B) contribution; the other asked the employer about NPS through payroll under 80CCD(2).

An Engineer Returning From Abroad

An engineer returning to India after eight years still held a foreign retirement account and rental income from an apartment abroad. Counting travel days showed RNOR status for the first years after return, during which the foreign rent was outside Indian tax. The plan covered the year in which the status would change, Schedule FA reporting, and foreign tax credit with Form 67 once the rent became taxable in India.

A Consultant With Irregular Income

An independent consultant earned most of the year's fees in the last quarter and missed earlier advance tax dates. The plan moved her to the presumptive scheme for professionals after checking eligibility, set quarterly estimates for the next year and separated personal and business bank accounts.

• Investing in March only for 80C, without checking what is already covered
• Choosing a regime with the employer without comparing both
• Claiming 80CCD(1) when the 80C limit is already full
• Forgetting that 80C, 80D and 80CCD(1B) do not apply under the new regime
• Ignoring advance tax on capital gains or rent
• Treating foreign income as tax-free because tax was paid abroad
• Not filing Form 67 before the return when claiming foreign tax credit
• Leaving foreign assets out of Schedule FA
• Filing late and losing loss carry-forward and the old-regime option

Senior Citizens

Senior citizens get higher limits for health insurance and deposit interest under the old regime and are exempt from advance tax if they have no business income. Form 121 at the start of the year avoids unnecessary TDS on deposits.

Employees With Stock Options

ESOPs are taxed twice: as salary when the shares are allotted, and as capital gains when they are sold. Planning the timing of exercise and sale, and the foreign tax credit for shares of a foreign parent, can make a large difference.

Families With Property in Several Names

Income from property and investments is taxed in the hands of the legal owner, subject to clubbing rules for gifts to a spouse or minor child. Planning ownership before buying is easier than restructuring later.

Hindu Undivided Families

A Hindu Undivided Family (HUF) is a separate taxpayer with its own PAN, basic exemption and deductions. Income from assets that genuinely belong to the HUF – such as ancestral property – is taxed in its hands, not the members'. Transferring a member's own assets into the HUF does not shift the income, because clubbing rules apply, so the HUF route works only where the assets are truly the family's.

• We are not a SEBI-registered investment adviser and do not recommend specific funds, policies or shares
• We do not sell insurance, mutual funds or any financial product, and we receive no commission
• We do not design arrangements whose main purpose is to avoid tax without a real reason
• We do not help hide income or foreign assets
• We do not promise a fixed amount of saving – the result depends on your income and choices
• We do not give legal advice on succession or property law; we work with your lawyer where needed

If your taxable income is within the new regime's ₹12 lakh rebate range, you have no capital gains, no foreign income and no business income, your planning is already done: the new regime will usually leave nothing to pay. Similarly, if your employer offers a simple regime calculator and your only deductions are provident fund and a small insurance premium, you may not need professional help. Come to us when you have foreign income, large capital gains, rental income, business income or a regime decision that is genuinely close.

1. Ask your employer: does the company offer NPS through payroll, and what will the employer contribute?
2. Ask HR: when must the regime choice and investment proofs be submitted?
3. Ask your bank: will TDS be deducted on deposits, and has my Form 121 been recorded?
4. Ask yourself: how many days will I spend in India this year, and do I hold any asset abroad?
5. Ask your broker: what are my realised gains so far this year?

Planning needs your salary, investments, property and family details. As chartered accountants we follow ICAI's confidentiality rules. Information is used only to prepare your plan and return, shared only with the team working on it, and never passed to product sellers or agents. When the engagement ends, documents are returned or archived as agreed in writing, and you can ask for their deletion at any time.

• Regime compared with real numbers and declared to the employer
• 80C items already covered counted before any new investment
• 80CCD(1B) and employer NPS considered
• Health insurance and other proofs kept from April
• Residential status checked from travel dates
• Foreign tax documents collected and Form 67 planned
• Schedule FA list of foreign assets updated
• Advance tax estimated before each due date
• Capital gains and losses reviewed before March

Our only office is in Whitefield, Bengaluru, where clients can meet us in person. Tax planning works well online, so we advise individuals and businesses in every state and NRIs abroad through video meetings and secure document sharing. We do not have offices in other cities.

What is tax planning?

Tax planning is arranging your income, investments and payments within the law so that you claim every deduction and relief available and pay no more than the law requires.

Is tax planning legal?

Yes. Using options the law offers is legal. Hiding income or creating false claims is evasion, and artificial arrangements can be disregarded under anti-avoidance rules.

Which is better, the old or new tax regime?

It depends on your deductions. The new regime suits people with few deductions; the old regime can suit those with large 80C, 80D, HRA and home loan claims. Compare both with real numbers.

What is the Section 80C limit?

Up to ₹1.5 lakh a year under the old regime. From tax year 2026-27, the same deduction is in Section 123 of the Income-tax Act, 2025.

Is 80C available under the new tax regime?

No. Deductions such as 80C, 80D and 80CCD(1B) are available only under the old regime.

What is 80CCD(1)?

Section 80CCD(1) gives a deduction for your own NPS contribution, up to 10% of salary for employees or 20% of gross total income for the self-employed, within the overall ₹1.5 lakh limit shared with 80C.

What is the difference between 80CCD(1) and 80CCD(1B)?

80CCD(1) uses the same ₹1.5 lakh limit as 80C. 80CCD(1B) gives an extra ₹50,000 for NPS over and above that limit. Both are old-regime deductions.

Can I claim NPS deduction under the new regime?

Only the employer's contribution under Section 80CCD(2), within the limit set by law. Your own contributions are not deductible under the new regime.

How to save tax on foreign income in India?

Check your residential status first; NRIs and many RNORs are not taxed on foreign income. Residents are taxed on worldwide income but can claim credit for tax paid abroad under a treaty or unilateral relief by filing Form 67.

Is foreign income taxable for a returning NRI?

Often not for the first years, if you qualify as resident but not ordinarily resident (RNOR). Status depends on your days in India in the current and earlier years.

Do I need to report foreign assets if they earn no income?

Yes. Residents must report foreign assets and accounts in Schedule FA of the return every year, whether or not they earn income.

Who has to pay advance tax?

Anyone whose liability for the year after TDS is ₹10,000 or more, except resident senior citizens without business or professional income.

What are the advance tax due dates?

15 June, 15 September, 15 December and 15 March, for 15%, 45%, 75% and 100% of the year's liability respectively.

When should I start tax planning?

In April, at the start of the financial year, when you declare your regime to the employer and plan investments and advance tax.

Do you recommend mutual funds or insurance policies for tax saving?

No. We are not a SEBI-registered investment adviser and do not sell or recommend specific products. We tell you how much deduction you need and which categories qualify.

How much does tax planning cost?

We do not publish fees. The total depends on your income sources, foreign income and capital gains, and our team shares the exact total after reviewing your documents and requirements.

Income Tax Return · NRI Taxation · International Taxation · Tax Audit · Tax Notices and Appeals · Form 15CA and 15CB · Company and LLP Registration

Share your latest salary slip or income details, last year's return and a list of your investments. Our team will compare both regimes, list the deductions you can still use and set dates for advance tax.

Contact Details

Office Address

IMAK Advisory, ITPL Main Rd, Pattandur Agrahara, Whitefield, Bengaluru, Karnataka 560066, India

Phone

+91 79798 50684 (call or WhatsApp)

Email

imakadvisoryteam@gmail.com

Sources: Income-tax Act, 1961 and Income-tax Act, 2025 (Income Tax Department, incometaxindia.gov.in; press release of 1 April 2026); Union Budget 2026 coverage of unchanged slabs and the ₹12 lakh rebate (1 February 2026); Business Today on Section 80C becoming Section 123 (24 March 2026); India Briefing on Form 67 and foreign tax credit (13 March 2026). Checked 2 November 2026.