Life is but a moment, a drama, a movie of sadness and joy, of love and laughter and everything in between. To enjoy such a life is a blessing and sometimes blessings have to be earned. A Life Insurance plan with tax saving investments helps you reap those benefits and enjoy a good life without any hurdles.
What is Tax? Who Pays Tax?
The Government of India taxes every individual on his or her taxable income. These may be salaried individuals, Hindu Undivided Families, firms, groups or associations of people, companies, local authorities, etc. It is mandatory for every citizen to pay their tax and if they fail to do so they will be held liable and be punished by law.
Income tax is paid according to the slab the person drawing an income comes under. The percentage of tax is based on these income slabs. For example, a woman drawing an annual salary of say Rs. 7,00,000 is liable to pay 20% of her income as tax. Apart from this tax, she is also held liable to pay other taxes as deduced by the Government from time to time. That’s a lot of money being spent in just paying taxes.
The next viable step will be to find a tax saving investment to save on all those taxes.
How to Save Tax
Tax saving investments are one of the best ways to save tax, let’s look at some others.
∙ Tax saving through instruments as listed by the Government in Section 80C, Section 80CCC and Section 80CCD of the Income Tax Act.
∙ Tax saving through instruments as listed by the Government in Section 80D, Section 80DD and Section 80DDB of the Income Tax Act.
∙ Tax saving through repaying a home loan under Section 80C of the Income Tax Act.
∙ Tax saving through repaying an education loan under Section 80E of the Income Tax Act.
∙ Tax saving by investing in shares under the Rajiv Gandhi Equity Saving Scheme.
∙ Tax saving by investing on long-term capital gains and sale of long-term capital gains equity shares.
∙ Tax saving by donating under Section 80G of the Income Tax Act.
Tax Saving Schemes
A lot of tax saving investments reap a huge amount of benefits. There are a couple of benefits that can be availed by a person to save on your tax.
Some of these include:
∙ A PPF or a Public Provident Fund where a maximum of Rs. 1.5 Lakhs can be saved per year.
∙ National Savings Certificate or NSC where you can save upto Rs. 1 Lakh per year.
∙ Tax saving deposits where a maximum of Rs. 1 lakh can be invested.
∙ Unit Linked Insurance Plans where a maximum of Rs. 1 Lakh per year can be saved.
Life Insurance Plans
Life Insurance Plans are basically insurance made out on the lifetime of the person. These come under the purview of tax saving investments and are perfect vessels of quick investment returns. This amount can be paid to the policy holder if the policy holder outlives the term of the plan or to the nominee if the policy holder dies during the term of the policy.
Benefits of A Life Insurance Plan
Besides being a tax saving investment, the best life insurance plans have a plethora of benefits, namely –
∙ It provides protection to your family in case of any untoward emergency. It gives your family the monetary protection required in case of the demise of the policy holder.
∙ It helps plan for all those retirement needs.
∙ It gives tax benefits that will help you set your goals and help you plan wisely for your future without an inch of worry.
Tax Saving Investment Plan
| Life Insurance Investment Plans | Age | Term of Policy | Assured Returns |
| LIC Amulya Jeevan | 18 years to 60 years | 15 years to 50 years | Rs. 25 Lakhs |
| Aviva I-Life Plan | 18 years to 55 years | 10 years to 35 years | Rs. 25 Lakhs |
| HDFC Life Sanchay | 30 years to 45 years | 15 years to 25 years | Rs. 1,05,673 |
| LIC New Jeevan Anand | 18 years to 50 years | 15 years to 50 years | Rs. 1 Lakh |
| Aegon Life iTerm Plan | 18 years to 75 years | 5 years to 40 years | Rs. 10 Lakhs |
| Bajaj Allianzi Secure | 18 years to 70 years | 10 years to 30 years | Rs. 20 Lakhs |
Conclusion
Choose a tax saving investments plan that is right for you and will suffice to your kitty. Remember to read all the documents before proceeding and making your choice.