Unlock Big Savings: 6 Tax Deductions You Can Legally Claim Under Nigeria’s New PIT Rules
- Nigeria’s tax landscape is changing from January 2026, with new tax laws signed by President Bola Tinubu
- Under the updated Personal Income Tax Act (PIT) rules, you must be proactive and claim specific deductions
- By consistently contributing, you reduce your taxable income, which means you pay less tax
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The tax landscape for individual earners in Nigeria has changed. Gone is the era where a broad Consolidated Relief Allowance (CRA) automatically handled much of the deduction work.
Now, under the updated Personal Income Tax Act (PIT) rules, you must be proactive and claim specific deductions to maximise your tax efficiency.
Source: Facebook
Here are six you should know:
Pension Contributions
You can deduct contributions you make to approved pension schemes.
By consistently contributing, you reduce your taxable income — which means you pay less tax. This plays into the structured regime that now replaces the automatic relief CRA once provided.
Life Assurance Premiums
Premiums paid for approved life assurance policies may qualify as deductions. If you’ve taken out such a policy, this deduction offers a great way to leverage an insurance product for both protection and tax saving.
National Housing Fund Contributions
If you’re contributing to the Federal Mortgage Bank of Nigeria’s housing fund (or other approved schemes), those payments can help reduce your tax burden. It’s a dual-benefit: fostering home ownership while lowering tax.
National Health Insurance Scheme Premiums
According to a BusinessDay report, premiums you pay into the National Health Insurance Scheme (NHIS) qualify as a deduction under the new PIT framework. Health cover becomes more than just wellness, it becomes tax-smart.
Donations to Approved Institutions
Charitable contributions (to organisations approved under the tax law) are deductible. If you support causes you believe in, this rule lets you do good and benefit your tax position simultaneously.
Approved Education or Scholarship Funds
If you contribute to approved scholarship funds or education-linked investments as recognised by tax authorities, those contributions may reduce your taxable income.
Investing in education, then, becomes not just socially valuable but fiscally wise.
Why this matters
With the reform, you no longer rely on the CRA for blanket relief. Instead, the new system forces you to actively identify and claim deductions. That shift demands awareness and planning.
Miss claiming eligible deductions and you’ll end up paying more tax than necessary. Claiming them means you keep more of what you earn, lawfully.
Quick tips for maximising deductions
- Keep proof of payments (receipts, bank slips, policy documents) for all the deductible expenditures listed above.
- Confirm that the scheme or institution you’re dealing with is approved by the tax authority under the PIT rules — only approved entities count.
- Review your tax status annually, especially when allowances or employment conditions change.
- Talk to a tax professional, especially if you have income from multiple sources or are unsure whether a deduction applies to you.
By understanding these six deductions and incorporating them into your tax planning, you position yourself ahead of the curve under the new regime. Take control now rather than letting change control you.
Source: Facebook
New tax law replaces reliefs with rent-based deductions
Legit.ng earlier reported that the federal government has overhauled Nigeria’s personal income tax structure by eliminating the consolidated and personal relief allowances and replacing them with a new rent-based deduction capped at N500,000.
This reform is contained in the newly enacted Tax Act, which redefines how taxable income is calculated for individuals.
According to the Act, taxable income now comprises profits from business, employment, investments, and capital gains, with total income computed after all approved deductions are removed.
Source: Legit.ng
