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Taxes which insurance plan is good for tax saving?

Tax Saving Insurance Plans: In general, people these days always think about saving money on taxes. If you are the one who is striving to know about the Taxes which insurance plan is good for tax saving. Then you are at the perfect place.

In this article, I am going to cover all the best tax saving insurance plans for the next financial year. As we go through the period of September most of the investor start to think about the tax saving options for the next financial year.

They often do this because their main motto was to save money on taxes. If you are one of them then you can understand easily If not you might struggle with a question like why insurance products avail tax deduction.

If you are worried about that means don’t worry I will be covering that below in an easier way.

Tax Saving Insurance Plans
Tax Saving Insurance Plans

Why insurance products avail tax deduction:

Most insurance products in India do often avail tax deduction mainly due to the rule 80C or 80D. Here 80C is nothing but a section, according to this section a deduction of Rs 1,50,000 can be easily claimed from your total income.

In simple terms, you can save up to Rs 1,50,000 on your total yearly taxable income through the section 80C. Every member can avail this deduction. Unknowingly, if you have paid excessive tax when you are having LIC, PPF or other insurances means you can file your income tax return and you can simply claim the amount. You will definitely get the refund if you properly submit your income tax return.

Now, After seeing the above statement,

Do you want to save your money by investing in tax saving insurance plans?

Then there are some important plans that you should know before investing your hard-earned money. Usually, tax saving is a vital part of the financial planning so you have to take a lot of care about it.

While you choose the best money saving insurance plan you have to take several factors in the equation such as safety, returns and liquidity along with these you have to make sure, that how the returns would be taxed.

Here are the tax saver plans which not only help you save tax but also help you earn the tax-free income.

Taxes which insurance plan is good for tax saving:

Usually, tax saving is a vital part of the financial planning so you have to take a lot of care about it.

While you choose the best money saving insurance plan you have to take several factors in the equation such as safety, returns and liquidity along with these you have to make sure, that how the returns would be taxed.

Here are the tax saver plans which not only help you save tax but also help you earn the tax-free income.

Life insurance tax saving investment:

As we are speaking about the tax saving investment, The Life insurance is the best tax saving option.

Although life insurance is not a pure form of tax saver but somehow owing to its benefits might be helpful. This insurance gets you covered in crucial situations and also acts as a financial cushion of your nominees.

The best part is the tax you pay for your life insurance can be deductible from your total income tax thus you can save the insurance money. This policy can help you to lower your taxes up to 1 and a half lakhs.

It is not over yet the received amount from the LIC after maturity is also non-taxable. In some cases, they may take some amount, but that happens in rare cases.

You can see several types of life insurance plans available in the present day market such as

  • Unit Linked Insurance Plans (ULIPs)
  • Term Plan.
  • Endowment plan.
  • Money back plans.

 

Equality Linked Savings Schemes:

Equality linked saving schemes are nothing but the equity mutual funds with two differentiating features. One is investment amount invested on them can be deducted under that section 80C  of the income tax act. Also, the amount financed is having a lock period of 3 years.

The result of the amount is mainly dependent on the equity markets other than traditional norms. Some may opt for dividend or growth and some look for regular income.

However, this equity MF scheme is having a mitigate risks, but one can quickly get through them if you have proper knowledge on equity shares. I am listing this in money-saving insurance because this can yield a huge amount of untaxable amount later.

 

Health Insurance tax saving:

Health is another crucial aspect, and you can save your tax on health insurance as well. Some people might not agree with this point, but surely it is the best insurance plan which is counted as a tax saving plan.

Although it offers no returns like other forms of investments it will get health coverage in the time of emergencies.

You can get a tax deduction on all the health insurance premiums you pay for health insurance. For senior citizens, the deduction amount is 20,000 for adults who pay for their parents will enjoy Rs 35,000 on the total tax amount.

Some people might think it isn’t worthy, but I bet this is one of the best ways to save tax amount at the same time you can secure yourself.

 

National Pension Scheme:

If you want to save money on taxes, you can make use of the national pension scheme. This is another best option which can help you deduct amount up to 1 lakh.

In the NPS scheme, the percent of the basic salary that your employer contributors towards your NPS are deductible. So you can deduct that amount as well. However, you cannot exceed the limit of deduction because your maximum deduction is set at 1 lakh rupees only.

 

Public Provident Fund tax:

The public provident fund is a central government scheme which is one of the long-term plans. According to the section 80C, the money you pay is tax deductible.

The limit of the contribution is Rs 70,000, and the interest you receive from that amount is the entirely tax-free amount so you can enjoy the benefits of the Public provident fund. this is another perfect way to save taxes on this topic “taxes which insurance plan is good for tax saving.”

 

Bonus:

You can also use NSC national saving certificate has all the features of PPF, and it is a risk-free organization. The only problem is Interest is taxable in this scheme.

Apart from these, you can also use “

  • Fixed Deposit schemes.
  • Senior citizen saving scheme.
  • Voluntary provident fund.
  • Sukanya Samriddhi Yojana (SSY)

Conclusion:

This is all about the topic “Taxes which insurance plan is good for tax saving?”. If you have any queries on the above topic please let us know in the comments section below.

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