Being in a strong financial position has become really important. While life’s uncertainties and changing economic conditions might be important reasons, one’s changing requirements imply the same. Now, you must be wondering what’s the best possible way, right? Well, there are many ways to tailor your investments to save. However, insurance investments that present tax saving opportunities stand as a popular way forward.
Every time the financial year approaches its end, tax season begins. With it comes several opportunities to save on insurance, but those of you who have the right knowledge about these tax saving investments can seize them fully. Continue reading to find out more about the Sections that offer tax deductions and plans that you may consider investing in.
Understanding How Insurance Investments Help Save Tax
Out of many tax saving investment plans, insurance stands out because you can avail of the deductions. Under the Income Tax Act 1961, several sections have provisions for tax deductions. Here’s what different tax provisions offer:
- Section 80C: You can claim a deduction of up to ₹1.5 lakhs on premium payments during any financial year.
- Section 80D: This section offers tax relief specifically to health insurance providers.
- Section 10 (10D): This section makes any life insurance policy benefit received tax-free, such as maturity or death benefit.
- Section 80CCD: If you have invested in NPS, the National Pension Scheme, you can claim a 10% tax deduction on the amount contributed from your salary (basic + DA). However, this deduction is only applicable when tax benefits received from 80C and 80CCD (1) do not exceed ₹1.5 lakhs in the previous financial year.
- Section 80CCC: Any pension plan that you may invest in provided by life insurance shall have a tax allowance of upto ₹1.5 lakhs.
Such investments not only present an opportunity to save taxes but also combine but also combine insurance coverage benefits. Some plans may even offer market-linked benefits, which are based on funds performance.
Once you have a financial goal decided, you can start looking for the appropriate insurance plan to invest in. However, you must also know the different types and their benefits to assess which one best suits you.
Exploring Tax Saving Insurance Plans
While the primary agenda of investing in an insurance plan is getting coverage and financial security, many of them offer tax relief as well. Below are a few insurance plans which may act as tax saving investments for you:
- Unit-linked Insurance Plans (ULIP): Here’s an attractive life insurance option if you’re searching for an investment with market benefits and tax deductions. All rolled into one package, this scheme offers a three-fold benefit. The first part of the premium will offer life insurance, and the other will offer market-linked investment returns.
- Life Insurance Plans: Life insurance plans help you save tax on the premium that you pay. It is eligible for deduction alongside offering whole life cover. So if your premium amounts to ₹1.5 lakh, you can assure your family’s future and also save tax under section 80C.
- Pension Plan: You can opt for different pension plans that are combined with insurance coverage benefits. These plans provide financial safety and create a retirement fund for the older members of your family, ensuring a steady income for them. The premium you pay for these acts as one of the tax saving options.
- Health Insurance Policy: It’s very important for you to protect yourself and your family from sudden medical emergencies. Health insurance is a smart tax saving investment. It helps you manage your money during tough times and keeps you financially stable. This plan also has the option to cover your spouse and your children. Plus, you can get a tax deduction of up to ₹25,000.
Choosing the Best Tax Saving Investments
Financial stability becomes more manageable when you invest in tax saving options. Your funds remain secure, but you also benefit from tax savings. Finding an insurance provider that truly understands your needs and aligns your financial goals with suitable schemes is essential.
You can select your investments with Canara HSBC Life Insurance. They offer some of the top tax saving opportunities. They ensure your needs are met with flexible premium choices and excellent returns on your investment.
Explore their official website to explore online tax saving investments for your future today!
