We all are always looking for ways to save tax. Insurance policies are popular among investors as tax saving avenues. One can park their funds safely, create wealth, secure future and take advantage of a rebate on taxable income too. What more can one ask for?
Let us look at a few examples on how some investors saved tax by investing in insurance policies.
Apart from this, the insured can also claim tax deduction on the premium paid U/s 80C of the Income Tax Act, 1961. Mr. Das was really amazed to learn of the tax benefit. Thus, he not only bought peace of mind for himself and his family, but also saved money by availing tax rebate.
One can claim tax rebate on the returns of the life insurance policy, that is the sum assured too subject to two conditions as listed U/s 10(10 D) of the Income Tax Act, 1961.
If any of the above are not met, then one cannot claim tax rebate.
These deductions are claimed U/s 80D of the Income Tax Act, 1961.
A fixed deposit is a pure investment instrument, which is completely risk free. On the other hand, child insurance plans are investment cum insurance plans. The amount invested and returns on fixed deposit are not tax deductible. Whereas, premium paid and returns on the life insurance policy, both are tax deductible. Tax benefits can be claimed U/s 80C and returns U/s 10(10 D) of the Income Tax Act, 1961.
Insurance is one indispensable part of our lives. Whether we are looking for home insurance, auto insurance, medical insurance or travel insurance or for any other thing, we just can’t move ahead without insurance. It provides us with the basic peace of mind by protecting us against probable future financial losses.
A word of caution: Before buying an insurance policy or investing in a ULIP, please do read the offer documents carefully and all terms & conditions. Investments must always be made based on your risk appetite. Always ask yourself before investing, “Does this investment help me in meeting my future financial goals”?
Be Wise. Stay Insured.
Your email address will not be published. Required fields are marked *
Nice Article. There is always pros and cons of every aspect. Indian Cu ...
Thanks for finally writing about >Why Indian women fall short on cr ...
Thank you for sharing your infօ. I reɑlly appreciate yⲟur efforts and ...
Daily Tips to stay Credit Healthy
© All Rights Reserved at Credit Sudhaar