Make smart choices with Top 4 Tax Saving Investment Options

By investing in specific insurance products, you can reduce your taxable income, which translates to lower tax outgo.

Financial management has always been about making savvy decisions to benefit your present and future position. The tax season motivates most of you to take charge of it. If you're also motivated enough to do so, you've come to the right place!

Many consider saving taxes just a dream, but is it really? Well, not because it's a tangible goal that any of you can easily achieve. All that you need here is the right knowledge of what tax-saving instrument to invest in and plan your strategy. Let's brief you about some of the best tax saving investment options you should apply for.

Why insurance as a tax saving investment?

No one wants to invite unfortunate situations, but life is such that uncertainties come knocking without notice and derail your financial plans. It may be an unexpected accident, a critical illness, or a disability. Here, insurances slide into your lives as one of the best tax-saving investment options to offer you and your family a financial safety net.

By investing in specific insurance products, you can reduce your taxable income, which translates to lower tax outgo. This allows you to invest more of your hard-earned money towards your financial goals.

What are the tax deductions available under the Income Tax Act of 1961?

In India, there are a couple of sections in the Income Tax Act 1961 that offer deductions. These are available for various insurance investments. Here's a look at how they work:

1. Section 80C: This is the most popular section for tax deductions. It allows you to claim a deduction of up to ₹1.5 lakh for investments made in various schemes. This includes life insurance premiums, Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), and more.

2. Section 80D: Health insurance premiums paid for yourself, your spouse, dependent parents, and even dependent children are tax-deductible under this section.

3. Section 10(10D): If the life insurance policies are issued for the benefit of a differently-abled dependent, then the premium is tax-deductible.

4 insurances that are the best tax saving investments

After understanding the tax benefits, continue reading further to learn about different types of insurance that can act as tax saving options for you:

1. Term insurance

Term insurance provides pure life cover at an affordable premium. Since the premiums are lower compared to other types of insurance, you can maximise your tax savings under Section 80C while ensuring substantial financial protection for your loved ones.

2. Endowment plans

Endowment plans provide insurance coverage as well as savings commitment options. The premiums paid for these are eligible for tax deductions under Section 80C and make this among the best tax saving investments for you. Besides, the death and maturity benefits are non-taxable under Section 10(10D) as well.

3. ULIPs

Unit-Linked insurance plans – they are the kind of schemes that have insurance with investment; under the Unit Linked Insurance Plans, the premium that an investor pays is separated. One part of it goes for insurance coverage, whereas the other part is to invest in market-fund. These have tax benefits under Section 80C and tax-free returns on maturation Section 10(10D).

4. Health insurance

At last, health insurance is required to trade off the expense of medical expenses. It should protect the expenses acquired because of any kind of health emergency. Hence, claiming Subsection 80D tax deductions on these policies allows you to save money on taxes. You must simply cover the premiums for yourself, your family, or your parents.

Choose from the best tax saving investment options today!

Tax benefits are definitely attractive enough for anyone, but becoming financially savvy requires you to work it up strategically. With this blog, you have all the information. However, to act upon it, you need to take a step forward. You need a trusted and reliable insurance provider like Canara HSBC Life Insurance by your side from whom you can even shop for the best tax saving investment options online.

From online Financopedia to their tax calculators, they offer a variety of resources for saving on taxes. Visit their official website today and make a tax saving investment in one of their popular plans, like Invest 4G, iSelect Smart360 Term Plan, and many more.