Tax benefits and tax savings with life Insurance

by

Samira Sharma

Tax planning is a great way to start for availing tax benefits and tax savings. To plan your tax savings, a key factor that is crucial to your tax saving plan is the income earned by the individual per annum as well as the income tax laws governing the country. Since the tax rates differ for each income bracket, the total tax an individual needs to pay depends on his annual income, but there are many ways to save your tax money.

To accrue maximum tax benefits, an individual needs to invest his earnings wisely in the various tax saving schemes. Channelizing your funds into diverse tax saving investment plans is the smartest way to maximize your tax benefits. Tax deductions which are granted by the government helps save the tax on premium paid as well as a tax free maturity as well. Investing in a pension plan for retirement is a very good option since it contributes to your family s future as well. Thus, planning your tax saving options in advance helps you take full advantage of the various tax saving plans available to get maximum tax benefits.

Life insurance instruments are one such product which helps us save more tax. Investing in instruments which saves your tax and should also be a well-thought out and planned exercise, rather than just a one-off investment without calculating the consequences. Getting a good life insurance policy is also a good tax saving plan since under the Income Tax Act 1961, by investing in a life insurance plan, an individual is allowed to write off the premiums that one has to pay while calculating his taxable income(subject to conditions of Income Tax Act 1961).

With tax benefits on the premium paid and benefits received under the Life insurance policy, as per the prevailing Income Tax laws, the premiums paid under this life insurance policy are exempted from tax under Section 80 C and maturity proceeds are exempted from tax under Section 10 (10D). Thus investing in a life insurance policy is a great way to ensure a bright future for your family as well as accumulating a lot of income tax savings on your taxable income.

Apart from investing in a life insurance policy, a health insurance is a great investment to make. It is a sensible

tax saving

option which helps you increase your income tax savings and live a confident life without any fear of any ailments of illnesses. Being a viable tax saving

Samira Sharma is a professional writer, presently writing for the insurance plan , tax saving investment and tax benefits. For more information of Tax planning visit –

tax benefits

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