Getting the maximum refund in AY 2025–26 requires not just declaring your income, but smartly optimizing deductions, planning your investments, and ensuring all reporting is accurate and verified. Here are the most effective strategies:
a. Choose the Correct ITR Form:
- Using the wrong form can delay processing or lead to notices.
- ITR-1: For salaried individuals with total income up to ₹50 lakh.
- ITR-2: If you have capital gains, multiple properties, or foreign income.
- ITR-3: For business or professional income.
- ITR-4: For presumptive taxation scheme (44AD, 44ADA).
b. Claim Maximum Deductions Under Chapter VI-A:
- Section 80C (₹1.5 lakh limit): Include LIC premium, PPF, NSC, ELSS mutual funds, principal repayment of home loan, tuition fees for children.
- Section 80D: Medical insurance premiums (₹25,000 for self/family + ₹50,000 for senior citizens).
- Section 80CCD(1B): Additional ₹50,000 for NPS contributions (over and above 80C).
- Section 80G: Donations to registered charitable organizations (50% or 100% deduction depending on NGO).
- Section 80E: Interest on education loan for higher studies (no limit, available for 8 years).
- Section 80TTA/80TTB: Savings interest exemption (₹10,000 for non-senior citizens, ₹50,000 for senior citizens).
c. Optimize Salary Structure:
- Structure salary to include exemptions like HRA, LTA, meal vouchers, etc.
- Submit rent receipts to employer to claim HRA benefit.
d. Utilize Home Loan Benefits:
- Claim interest on home loan under Section 24(b) up to ₹2 lakh/year.
- Claim principal under Section 80C.
- For first-time buyers, claim additional deduction under Section 80EEA (₹1.5 lakh extra interest) if eligible.
e. Declare & Report Exempt Income Properly:
- Report even exempt income like agricultural income, gifts, and EPF maturity.
- Schedule EI in ITR must be filled properly to avoid mismatches in AIS or TIS.
f. Double-Check Form 26AS, AIS, and TIS:
- Mismatches between your declared income and the Annual Information Statement (AIS) or Taxpayer Information Summary (TIS) may lead to reduced refund or scrutiny.
g. File Early and Verify Promptly:
- Early filing leads to early refund.
- Verify your return using Aadhaar OTP, net banking, or DSC within 30 days of filing.
h. Include All Bank Interest Income:
- Even if TDS is deducted, declare interest from FDs, RDs, and savings accounts.
Bonus Tip: Always reconcile salary slips, Form 16, and bank statements before final filing.
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