Categorized | Investment Insurance

tax effective planning for insurance and investment

Tax planning services are gaining immense popularity in the financial market today owing to the utilization of effective tax planning strategies by various companies and individuals. Tax effective strategies for maintaining proper insurance and investment plans are what the whole world is running after. It is very evident that individuals involved in any profession or any business venture or entrepreneurship venture takes utmost pains to locate deductions that they are eligible for.
 
Benefits of Insurance policies in terms of protection, returns and tax benefit

Insurance plans provide a wide range of life cover and investment options to customers. With a life insurance plan, the Policyholder can rest assure that his family’s present and future life will not suffer if he is not around them to take care of their financial needs. Besides, life insurance plans offer income tax benefits. Tax effective planning for any investment and insurance is a task that has to be given prime importance when complete satisfaction is desired in the concerned field. A tax calculator can be used to calculate the income going to taxes every year.

Tax benefit on Life insurance plans (Under Section 80C of the Income Tax Act)

Section 80C of the Income Tax Act provides the alarming benefits of being eligible for a deduction amounting to about Rs 100,000. It gives the customers the option to Claim deductions based on the life insurance premium, home loans, principal payment, and PPF deposits and so on. The benefits are available for individual assesses and also to the Hindu undivided family assessee. The individual, spouse or children of the assesses can benefit from the deductions. Any member of the family can benefit when the HUA assessee is considered. It is the most effective tax saving instrument and can offer protection, efficient long Term savings and proper tax planning.

Tax benefit on Pension Plans (Under Section 80CCC)

Premiums paid under a pension scheme gets deductions with the Section 80CCC in function. The total amount deposited in the form of pension excluding the bonuses and interest is deducted from the total income when tax calculations are made. This gives considerable tax benefits to those enrolled in pension schemes as a part of life insurance policies. On Maturity of a pension plan, one third of the withdrawn amount is tax free which provides maximum benefits to the individual.

Tax benefit under Section 80DD


Less people are aware that Section 80DD provides tax benefits to an individual which is a welcoming aspect for all people. Deductions up to Rs 50,000 per year can be gained for any kind of medical treatment for a handicapped dependent individual. The benefits can be gained by furnishing a medical certificate. In case of severe disabilities, larger amount upto Rs 100,000 can be claimed.

Tax benefit on returns under Section 10(10D)

With respect to the Section 10(10D); there is an advantage of getting tax free returns for the sum received under the life insurance policy. This also includes the sum that has been allocated for bonuses. The death benefit  and maturity benefit is completely tax free under this section.

Services related to tax plans and tax saving techniques is an investment worth making when experts are consulted and professional help is taken.