How do I save tax in the new regime?

Most deductions do not exist in the new regime — 80C, 80D, HRA and self-occupied home-loan interest are all unavailable. Employer contributions under Section 80CCD(2) are the main thing that survives, worth up to 14% of basic and DA. On a ₹15,00,000 salary that is about ₹13,104 of tax.

What the new regime takes away

The lower slabs are paid for by removing nearly everything you could previously deduct. In FY 2025-26 the new regime has no 80C (the ₹1,50,000 bracket), no 80D health-insurance deduction, no HRA exemption under Section 10(13A), and no deduction for interest on a self-occupied home loan under Section 24(b).

That is why most of the advice written for the old regime simply does not apply. The question "how do I save tax" has a much shorter answer here, and the honest version of it is that the main lever has nothing to do with what you buy.

The deduction that survives

Employer contributions under Section 80CCD(2) remain deductible in both regimes. In the new regime the limit is 14% of basic salary plus DA, against 10% in the old regime for private-sector employees — one of the very few places the new regime is the more generous of the two.

It is not an amount you choose to spend. It is a contribution your employer makes as part of your package, so it depends on your employer offering it and on how much of your salary is classed as basic rather than allowances.

deduction = 14% × (basic + DA), new regime

What it is actually worth

Taking basic at 40% of gross, and comparing tax with and without the contribution:

On ₹15,00,000 the deduction is ₹84,000 and tax falls from ₹97,500 to ₹84,396 — a saving of ₹13,104. On ₹20,00,000 it is ₹1,12,000, and tax falls from ₹1,92,400 to ₹1,69,104, saving ₹23,296. On ₹25,00,000 it is ₹1,40,000, and tax falls from ₹3,19,800 to ₹2,82,100, saving ₹37,700.

Where basic is 50% of gross rather than 40%, the same salaries save ₹16,380, ₹29,120 and ₹46,800. The salary has not changed in either row — only the share of it classed as basic — which is the clearest illustration of where this lever actually lives.

Below about ₹12,75,000 it does nothing

On a ₹10,00,000 salary the deduction is ₹56,000 and the tax saving is zero. That is not an error: taxable income was already under the ₹12,00,000 rebate limit, so the tax was nil before the deduction and is nil after it.

The rebate makes deductions worthless below the threshold, and valuable above it. If your gross is under roughly ₹12,75,000 the useful question is not how to reduce tax you are not paying — the guide on whether ₹12 lakh is really tax-free works through where that line sits.

What it costs, and what this page is not saying

A contribution routed this way is not spare cash. It goes into a retirement account and is locked until retirement, with limited exceptions, so the tax saved comes with your money being unavailable for years. That trade is a real one and only you can judge it against what else the money would do.

Whether to opt in, and whether your employer offers it at all, are outside anything this page can tell you — it states the arithmetic on the figures above and stops there. If the split between your basic pay and your allowances is something your employer will discuss, that conversation is where this lever is pulled.

The other honest answer

The remaining way to pay less tax in FY 2025-26 is to check you are in the right regime at all. The old regime still wins for people who can genuinely claim a large stack of deductions — HRA on real rent, a home loan, 80C that is already committed — and the comparison turns entirely on your own figures.

These figures assume a resident individual below 60 with salary income only. They exclude surcharge above ₹50,00,000, capital gains, business income, more than one house property and the senior-citizen slabs.