Investment declaration 2025: What salaried taxpayers in the new tax regime should know before the last date

Since the beginning of the Financial Year 2025-26 on April 1, employers have been sending emails to their employees, asking them to declare their tax-saving investments for the year.

Investment declaration is important to avoid full tax deduction at source (TDS) on salary, especially if you are in the old tax regime. In the new tax regime, however, it is not required for most employees.

As the last date of investment declaration set by HR departments is near, this article explains key points you need to know about investment declaration in the new regime:

First thing to do

What's the norm?

Salaried employees have to declare their expected tax-saving investments and additional incomes at the start of the financial year. The employer uses these details to deduct tax from salary in advance and pay the government.

A few months before the end of the financial year, employers ask to submit proof of investments declared at the start of the year. If an employee fails to submit the proof, then the employer increases the tax deducted in the remaining months.

This system of declaring expected tax-saving investments and advance tax deductions has worked well for years. Since the introduction of the new tax regime in 2020, however, a lot of employees are confused every year about whether to make the investment declaration or not.

Who will benefit from the investment declaration?

Investment declaration will mostly help salaried taxpayers in the old tax regime. It allows various tax deductions and exemptions against certain investments. You can declare such investments that you plan to do in FY 2025-26. Your employer will deduct tax from your salary after factoring in the investments.

However, if you are in the new regime, you do not have to submit any proof for exemptions and deductions. More so because most of these exemptions and deductions are no longer available in the new regime.

The new regime offers two types of deductions for most of the salaried taxpayers:

1. Standard deduction of ₹75,000 from salary/pension

2. Deductions against the employer's contribution towards NPS and PF accounts.

You are not required to do anything about the above deductions in the new regime as they will be handled by your employer.

What you may declare in the new regime

The new regime allows tax deduction against interest paid on a housing loan for a let-out property. You may declare this to the employer along with details of your rental income.

Some employers ask for details of expected income from other sources, such as interest on savings accounts, provident fund interest on contribution above ₹2.5 lakh, national savings certificates received, or any other income. While you may declare these incomes, it is possible that you might not have this information at the start of the financial year.