There are numerous ways to achieve the financial goal and one of the fool proof way is to intelligently strategies tax planning. Tax saving is a significant part of financial planning and it can help to achieve the dual objective to meet the financial goal and save bundles on taxes. Nowadays, as one can get plethora of options of tax saving investment plans and choosing an apt plan to gain maximum benefits can become confusing. So, to help our customers choosing the most beneficial plan, here we have discussed briefly some of the best tax saving investment plans by HDFC Life Insurance.
In any individual’s financial portfolio, a life insurance policy plays a significant role. The earlier one buys a life insurance plan for him/her the more beneficial it is to safeguard the family in case of any eventuality. A life insurance plan, be it market linked or traditional offers tax exemptions to the policy holder on the premium paid. A life insurance plan, be it market linked or traditional provides tax benefit to the insured person of the premium paid.
Types of HDFC Life Insurance Plans
- Term plan
- Endowment plan
- Unit-linked insurance plan
- Money back policies
The premium paid up to maximum limit of 1.5 lakh towards HDFC Life Insurance offers tax exemption under section 80C of Income Tax Act. Death claim and maturity benefits are eligible for tax benefit under section 10(10D) of Income Tax Act.
Pension plan is a type of life insurance plan that serves a different end-objective as compared to the other insurance plans. Pension plan aims to provide continuous flow of income to insured in proper intervals of times. It safeguards the financial future of the individual after retirement. Under 80CCC of Income Tax Act the contribution towards pension are are covered. Up to 1.5 lakh of premium paid are exempted under section 80C of Income Tax Act. In-case of maturity of the policy about 1/3rd of the collected pension amount is tax free and the death benefit is also exempted from tax deduction.
Tax Saving Mutual Fund
Mutual fund tax saving investments can also be termed as equity linked saving schemes and are eligible for tax benefits. In mutual fund the money is invested in various equity linked fund options like debt, stock market, etc. Equity linked mutual funds are more suited for investors who have medium to high risk appetite. Investments up to maximum limit of Rs1.5 lakh towards equity linked saving schemes are covered under section 80C of Income Tax Act. The maturity and death proceeds are also tax exempted under section 10(D) of Income Tax Act.
National Pension Scheme (NPS)
The Government of India has established the Pension Fund Regulatory and Development Authority (PFRDA) that works for development and regulation of pension sector. One of the best instruments of retirement planning is to begin investing in National Pension System (NPS). NPS is one place where one gets the benefit of low cost, tax planning, equity exposure and retirement orientation.
Under section 80CCD of Income Tax Act, NPS investments are eligible for tax exemptions of up to Rs1.5 lakh per year. In year 2015, the deduction amount was increased by 50,000. So, one can avail a tax benefit of Rs50,000 by contributing Rs2,00,000 to National Pension System.
Public Provident Fund
Public Provident Fund is a government sponsored retirement planning investment and saving plan. The maximum investment up to Rs1.5 lakh is exempted from tax deduction under section 80C of Income Tax Act and the maturity proceeds are also tax free under section 10D of Income Tax Act.
Choosing a proper tax saving investment plan is very crucial in order to achieve long term financial goals. With the help of these tax saving investment options one can chose the most beneficial HDFC Life Insurance plan according to the suitability.