With only a few months left for the tax-saving season to end, those who haven’t invested in tax-saving investment avenues, there is still hope. Thanks to the power of the internet, there are numerous ways which can help to save taxes. When the financial year is coming to an end, go with online insurance policies to save both your time and money (i.e. tax). Let’s discuss some ways to save tax:
Can Health insurance premium save taxes?
Health insurance premium payment provides a maximum deduction of Rs 25000 annually. Coverage offered can be availed not only by you but also your spouse and kids. If the spouse is more than 60 years old, the tax deduction limit is Rs 30,000.
People who have incurred expenditure on the health checkups of the family members can enhance the upper limit by Rs 5000.
Here’s how much you can save in tax:
There are online insurance policies available which not only promise to secure your health but also save your time.
How about securing your family and enjoy tax benefit?
A term insurance plays an essential role in securing the future of your family even in your absence. In addition to covering your life, the policy gives tax benefits under Section 80C. Both the premium and payout of term insurance are tax-free. Moreover, it is an online insurance policy which you can purchase from the comfort of your home.
How can ELSS save money on Taxes?
One should invest in ELSS to get a rebate on income tax. The scheme is a diversified equity option that qualifies for deductions under the section 80C of the income tax act. Also, people also benefit from the capital appreciation of the funds.
Interest rates are reset on a quarterly basis according to the security rates prescribed by the government. In fact, investments of 1, 50,000 can be declared in the income tax under the same section as mentioned above. ELSS has a short lock-in period, and it is part of the systematic investment plan.
Why is Investment in PPF essential?
Yes, if you are investing in PPF every year, it is possible to save taxes under the section 80C. Prior to 2014, the limit was Rs 1 lakh. However, the thresh hold is now raised to Rs 1.5 lakhs. The whole investment can be claimed under deductions if it is below the limit. One of the most important advantages of the PPF is that the interest accrued from it is not taxable. In addition, wealth tax is not imposed on the PPF account. In short, one gets an exemption from the tax on deposits and returns.
Investment in FD, is it worthwhile?
Yes, it is worth. However, one should be situated in the lower tax bracket. It is quite easy to invest in the fixed deposit, but the interest accrued from the bank is taxable. Generally the lock-in period is five years, and if the interest is below Rs 10,000, it is tax-free.
NPS qualifies for tax exemption? Is it true and how?
National Pension scheme is suitable for tax deductions under the present tax regime. If the individual is under the tax category of 10%, 20% and 30%, it is possible to avail the benefits. For instance, if your income is Rs 10 Lac per year and the NPS contribution is 4 Lac, one can claim Rs 1.5 Lac as deductions.
If the employer is contributing towards the NPS, the employee can claim additional 10% deductions.
Can I donate to charity and claim deductions?
Generally the donation up to Rs 10,000 qualifies for a tax deduction.
A Snapshot of Tax-Saving Investments Under Section 80C.
Conclusion:
Though early tax-planning is always recommended, you can purchase some online insurance policies and investment policies and save tax.
