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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
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Ref. No. KLI/22-23/E-BB/999
Curious about tax saving instruments other than 80c? Here are top 8 Tax saving methods which will help you save tax. Click here on Kotak Life to read these Tax saving Instruments!
It is your civic duty to pay your taxes on time. However, taxes have a huge impact on your pockets, as they reduce your earnings. As an informed individual, your aim is to reduce your tax liability. You are always looking to learn different ways on how to save tax. A healthy budget will ensure that you remain financially responsible and always make well- informed decisions. If you do not plan well, you will not be able to saves tax. Hence, it is important to be aware of the different tax saving methods in India.
Listed below are some common tax-saving options available for individuals in India to help save tax as per the Income Tax Act, 1961.
1. Home loan repayment
If you have a home loan, the Equated Monthly Installments (EMIs) will help reduce the burden of taxes. You will be able to claim a deduction of the interest component and principal amount of the installment. If you are repaying the home loan for your first house, you can save a higher amount of tax. The deductions will be available under Section 24, Section 80C, and Section 80EE.
2. Term insurance
A term insurance plan is one of the best tax-saving instruments. You can claim a maximum tax deduction of INR 1.5 lakh under Section 80C on the premium amount paid for term insurance. Investing in a term insurance plan is one of the best tax-saving tips, as the death benefit is also tax-free according to Section 10 (10D).
3. Rent paid
According to Section 80GG of the Income Tax Act, there is a deduction on rent paid and it is covered under ‘House Rent Allowance’.
4. Employee Provident Fund (EPF)
Investing in an EPF can help in tax saving. EPF is the amount contributed by you in your Provident Fund (PF) or EPF account. It can be claimed as a Section 80C. The interest, as well as, the maturity amount is exempt from tax if you have completed five years in the company.
5. National Pension Scheme (NPS)
NPS is a low-risk and highly secure investment option. The investment is eligible for a for income tax deduction under Section 80C.
6. Sukanya Samriddhi Scheme
This scheme is available only for parents or guardians of a girl child and it offers a higher return as compared to a PF or Public Provident Fund (PPF).
7. Donations
Charitable donations will make you eligible for tax exemption up to an amount of INR 2,000 under Section 80G.
8. Unit-Linked Insurance Plans (ULIPs)
ULIPs are one of the most preferred tax saving instruments in the country. If you have excess cash, you could invest it in ULIPs. If the premium paid is below 10% of the sum assured, you can avail of tax benefits. Moreover, the returns earned while investing in ULIPs are also tax-free.
Consider these tax-saving options to reduce the amount of tax payable by you. Do not make an investment keeping the tax benefit in mind, consider your long- term goals, risk, and return before you make a call. It is important to make a well- informed decision to enhance the returns and make the most of tax benefits.
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Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
