Tag Archive | "Investment Insurance"

your tax saving investment options choose as per your needs!

  • Easypolicy
  • 31 Jan 2013

Tax planning is critical for the success of your investment options. As it has been rightly said that ‘a penny saved is a penny earned’, you should not only be aware of the various investment options available in the market but also the instrument which can help reduce your tax liability. Here below we will be discussing few of the most popular investment-cum-tax saving options that will help you just do the same.

Life insurance


This is one of the most popular investment instrument which provides a dual advantage of tax saving and investment income. Section 80C of the Income Tax Act 1961 provides for tax exemption on investment of up to Rs 1, 00,000 in life insurance products. Owing to this exemption, a huge number of people opt for life insurance and given the kind of magnanimous market it has become, a host of insurance companies have entered into this lucrative business. Resultantly, it becomes very difficult to determine the best suited product out of dozens of options available in the market. Financial literacy is a key for making an informed decision. Once you are aware of the nitty-gritty of buying life insurance plan, you can easily develop an online investment plan and factor-in all your requirements and expectations in terms of rate of return, Maturity period, additional riders, liquidity etc.

ELSS

Equity linked savings scheme popularly known as ELSS is another way of saving tax and making investments at the same time. Through this investment, you can invest in equity markets and also save tax. However, as the name suggests, it is linked to equity market and you have to gauge your appetite for risks. The return on investment can be higher than other investment plans which put your money in traditional debt products but given the volatility of equity markets it may not be a win-win situation always. The exemption under Section 80C is applicable with this product as well.

PPF

Public Provident Fund is perhaps the oldest investment plan in India. It is yet another product which enables you save tax and get returns on your investments. Though you have to keep in mind that investment in PPF is done with a long Term horizon and also the rate of return is quite modest. Usually, PPF investment is made on invest-and-forget basis, and an investor takes account of his or her investment in PPF after 10-20 years. Of course, it offers security and a sizeable corpus in the long term.

FD

Fixed Deposits (FDs) for period more than five years fall under the gamut of Section 80C. Needless to mention the interest rates applicable for this widely popular investment product – you can easily check and compare them online.

Well these were few of the options you may consider for saving tax through investments. It is advisable that you compare investment plans before taking a final decision. Products such as PPF and FDs may not suit your needs if you are expecting high returns, but others which invest in a mix of equity instruments can provide you with relatively higher returns along with flexibility and liquidity.


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tax saving investment options

  • Easypolicy
  • 31 Jan 2013

It is necessary to invest money wisely so that your wealth grows over a period of time and provides you security in your old age. However, these investments should be made after proper research and consideration.

There are many ways to save tax and you can get this information on the internet. With a little research, you can find an online investment plan and then compare the investment plans.

Following are various investment options through which you can save your tax:

•Equity Linked Savings Scheme

There are many methods of investment which can help you to save on your taxes. Investing in ELSS schemes is one of the best investments if you are ready to take the risk. The lock in period in this method is the least. There are three kinds of options available in ELSS i.e. Growth Option, Dividend Option and Dividend reinvestment option. Equity linked Savings Scheme plans which provide a great avenue to save on taxes and get growth at the same time.

•Insurance Policies

Insurance also provides many investment plans which help you to save taxes. There are two avenues associated with life insurance policies, one is the life cover and second is the investment returns. You may not treat insurance as simply a tax saving plan, because the main task of insurance is to provide for difficult times. You should keep in mind what the requirements of your Dependants are, before you take a life insurance plan. If you cannot spend much, then you should opt for a Term insurance plan which is affordable and provides life cover.

•Public Provident Fund

You can also invest in a PPF account which is one of the best investment products. Investments in PPF accounts will be exempt from taxes; both the interest and the Maturity amount are tax-exempted. However, there is a limit to the amount that you can invest in a PPF account in a year.

•Home Loan Principal

The principal component of the EMI being paid for your home loan is also exempt from taxes. It is best to get a break up from your bank.

•Medical Insurance Premium

You can avail a limited deduction if you pay your medical Premium for yourself, your spouse and dependants. Along with this, if you are also paying a medical premium for your parents, it will be eligible for further exemption.

You should also check what your contribution to your PF account is. This is because this money is also tax exempt and you can further save taxes with your annual contribution to your PF account.

In a nutshell:

•Check your contribution to the PF account

•Check the principal component of the EMI of your home loan

•Make investments according to your financial goals

•Evaluate your requirement for insurance

If you find it difficult to decide which plans to choose from then the best way to follow is to consult some professionals. There are professional investment consultants who will be able to guide you on how you should plan your investment. These consultants will analyze your financial situation and decide which plans will suit you the best.


tax saving insurance plans

  • Easypolicy
  • 28 Dec 2012

Health Policy and tax saving schemes go hand in hand with various benefits offered to the people. Nowadays, due to high competitiveness in the market, public sector and private sector health Insurer are offering customized and innovative health products that take care of the overall healthcare need of the customers. Apart from providing the safety aspect, Health Insurance plans are known for acting as tax saving tools. Tax plans can be framed with the aspect of insurance in the picture.

Types of health insurance (Individual & Family Floater)

Health insurance plans offered by various insurance providers are classified as individual health plans and family floaters. As the name suggests an individual plan means getting a policy to secure the health related aspects of just one person. Family floater plans are an extension of the individual health plans covering the whole family. The medical expenses and requirements of the complete family (spouse, children, parents) can be handled with family floater plans whereas only the requirements of an individual is taken care of in the individual plan. There are various benefits and disadvantages of both these plans but care has to be taken to choose the plan suitable for you and your family. The aspects of budget and Coverage have to be considered before selecting the right plan.

Benefits of Health Insurance Plan

Health insurance plans and Mediclaim policies serve to be the best way to secure the health aspect of an individual and family. The coverage can differ based on the type of policy and the amount. Hospitalization expense of the Insured person/s is taken care of. Day care hospital expenses for dialysis, radio therapy, chemotherapy and other treatment methods will be covered based on the policy specifications. Additional expenses in the form of doctors fee, nursing fee, pre-hospitalization charges, maternity expenses, emergency ambulance expenses, post hospitalization charges are taken care of by the company. There are much more benefits of health insurance which provides timely help during conditions arising due to health ailments or accidents.

Tax benefit on Health Insurance Premium (Under Section 80D)

All the forms of investment made in order to pay for health insurance premiums are considered to be eligible for tax deductions under Section 80D of the Income Tax Act. Individuals can Claim for the tax deductions if they have paid the health insurance premiums for self or for the family. Under Section 80D a person is eligible for a deduction of upto Rs 15,000 from his taxable income. In case of senior citizen, the deduction can be claimed upto the limit of Rs 20,000.

LIC of India, Birla Sun Life Insurance, HDFC life Insurance, ICICI Prudential, Bajaj Alliance and Tata AIG are some of the popular companies offering such tax saving insurance schemes. Health insurance policy can be considered to be a great investment that can be worth the money and is believed to be a wonderful option to secure oneself against medical emergencies.