68% of IT professionals could’ve saved average of ₹49,094 in taxes in FY25, 33% chose wrong tax regime: Study

IT professionals often earn higher CTCs, but when it comes to tax planning, many choose the DIY route—relying on limited information, sticking with the default tax regime or taking last-minute decisions. The result? Missed deductions, wrong tax regime choices, and unnecessary tax payments.

According to a study by financial planning company 1 Finance, more than 33% of such IT professionals chose the wrong tax regime, while 68% could’ve saved ₹49,094 in taxes on average. Another key finding was that eight out of 10 professionals missed the benefit of Corporate NPS, and even fewer used it correctly.

As many as 1,865 IT professionals were part of the survey for the financial year 2024-25.

Here are the key findings:

1. 33% chose the wrong tax regime

Many professionals ended up choosing the wrong tax regime because they likely did not estimate and compare the deductions they could claim under the old and new regimes. Out of these 33%:

● 86% should have shifted from the old to the new regime

● 14% were better off switching from the new to the old regime

2. 68% could’ve saved ₹49,094 in taxes on average

Nearly 2 out of every 3 professionals could’ve saved taxes through legal strategies. The research shows that tax-saving potential wasn’t uniform; it varied widely by income. The higher the income, the more professionals stood to lose by not seeking proactive, personalised tax planning.

3. Corporate NPS: 8 out of 10 missed the benefit, and even fewer used it correctly

Corporate NPS remains a hugely overlooked tax-saving opportunity. While companies often stick to mandatory deductions, few extend the benefits of Corporate NPS to employees, mainly due to additional legal paperwork. On the employee side, lack of awareness and concerns about the long lock-in period and withdrawal limits further discourage participation.

Despite Corporate NPS contributions being fully deductible for companies under Section 36(1)(iva), only few employers offer this benefit, and even fewer employees take full advantage of it.

4. Compliance gaps and costly mistakes a CA can help avoid

Even beyond missed deductions, DIY tax filing often leaves hidden compliance gaps—errors that a qualified CA would catch and correct upfront. Among the IT professionals:

● 4% needed to deduct TDS on rent of more than ₹50K/month. Non-compliance could lead to 1%-1.5% monthly interest and a penalty of ₹200 per day for default.

● 13% was required to pay advance tax, which, if not paid timely, leads to interest of 1% per month.

● 31% had two or more income streams (e.g., salary + freelancing), increasing the chance of using the wrong ITR form or missing income disclosures.

● 15% held cryptos, an area where misreporting or incorrect ITR selection is common.

The bottom line

For high earners, DIY tax planning and filing isn't just risky, it's potentially financial sabotage. Every deduction you miss, every strategy you overlook, and every rupee you overpay is money lost forever. And it adds up fast. Professional tax planning is the shield you need. It protects your income, maximises your deductions, and turns tax season into a wealth-building opportunity. The real cost of DIY isn’t your time. It’s your peace of mind.

CA Niyati Shah, Vertical Head - Personal Tax at 1 Finance, explains how a qualified professional help can prevent DIY mistakes: "When a tax expert and a financial advisor step in, it’s not merely to balance numbers, but to ensure every decision truly reflects what matters most, with care and competence. That’s when true financial wellbeing begins, not with a calculator, but with understanding," added Shah.

Disclaimer: The key findings are based on internal research of 1 Finance and are for information purposes only.