Tax Season Is Coming- Know How to Save Tax

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Tax Season Is Coming- Know How to Save Tax
  • 27th Jan 2020 |
  • 3,825

With the tax season around the corner, you should start gearing up by investing in tax-saving instruments. You can find several investment options to suit your requirements like budget and risk appetite and fulfill those long-term wealth creation plans. So, let’s begin this New Year with some insightful ways of saving on taxes.

Best Ways to Save Tax

You can invest in numerous financial instruments to save tax and reduce your taxable income. But not every taxpayer iscomfortable with all the kinds of investment options available. Hence, here are some financial tools to help you save taxes as well as choose an option that suits your requirements.

1. Insurance

There are several types of insurances that you can buy to secure yourself. But the tax-saving options in insurances are life insurance, Unit-Linked Insurance Plan (ULIPs), and Health Insurance.

a. Life Insurance

Life insurance is a plan which provides you with a life cover, for example term insurance, for a fixed period of time. In return, you have to pay the premiums for the insurance policy on a regular basis. You can avail a pure life cover plan or a policy which fulfills long-term savings goal. The premiums paid towards securing insurance can be claimed under Section 80C of the Income Tax Act, 1961. Also, the death benefit can be claimed under Section 10(10D).

Invest in Term Insurance now and Save Tax

b. ULIPs

Unit-Linked Insurance Plan is a type of policy that is a mix of investment with life insurance. In this plan, some amount of the premium is invested in shares or bonds and some are used for providing a life cover. You can choose the investment option from equity or debt as per your risk appetite. You can claim income tax deductions for the premium paid under Section 80C. The maturity amount received can be also claimed for tax exemption under Section 10(10D).

c. Health Insurance

Health insurance is a policy that provides coverage on medical expenses incurred on hospitalization, treatments and other such costs. The premiums paid help in getting health insurance to avoid hefty treatment expenses and to safeguard yourself from any unfortunate incidences. Tax benefits can be claimed under Section 80D of the Income Tax Act, 1961 for the premiums paid towards the plan.

2. Investments

a. Equity-Linked Mutual Funds (ELSS)

Equity-Linked Savings Scheme is a diversified mutual fund with a lock-in period of 3 years. Through this investment, you can experience the power of compounding which ends up
giving you good returns in the future. You can get tax benefits and claim an exemption under Section 80C which has a maximum cap of INR 1,50,000.

3. Tax-Savings Fixed Deposit

a. Post Office Time Deposit

A post office time deposit is similar to a fixed deposit with a tenure that varies from 1 to 5 years. The benefit of having a TD is that even a minor can invest in this option. Contributions made towards a five year TD can be claimed under Section 80C of the Income Tax Act, 1961.

b. National Saving Certificate (NSC)

National Saving Certificate is a governmental scheme that can be availed at a post office. This investment has a lock-in period of 5 years where you can invest a minimum amount for fixed returns after maturity. You can claim tax exemption under Section 80C with a cap of INR 1,50,000 per financial year.

4. Provident Funds

a. Public Provident Fund (PPF)

PPF is an investment tool initiated by the government and has a lock-in period of 15 years. It is a lucrative option for investors looking for low-risked alternatives. You can get a dual tax benefit as the money invested in the scheme can be claimed under Section 80C and the lump sum received after maturity is also deemed as tax-free.

b. Employee Provident Fund (EPF)

EPF is an investment option for employees working in an organization. A small part of your income gets contributed towards EPF and remains exempted from tax. You can claim it under Section 80C of the Income Tax Act, 1961.

5. Loans

a. Home Loans for Construction or Buying a House

You can claim tax exemption on the repayment of the principal amount on home loan under Section 80C. Also, the interest paid on the home loan can be claimed under Section 24.

b. Home Loan for Renovation

A home loan for renovating your house also gives you tax benefits under Section 24. A maximum amount of INR 30,000 per financial year can be claimed for the interest paid on the loan.

Save Tax Now

Some Tax-Free Incomes You Should Know About

1. Agricultural Income

Income earned from agriculture is considered a tax-free income under Section 10(1). But the regular filing of Income Tax Returns should be practiced even if the earnings from agriculture are exempt from tax.

2. Interest from Savings Account

A maximum deduction of INR 10,000 can be claimed under Section 80TTA on the interest earned. For claiming the deductions, you can show the interest earned from your savings account as income from other sources while filing ITR.

3. Hindu Undivided Family (HUF) Receipts

Any money received or inherited as a member of HUF is exempt from tax and can be claimed under Section 10(2). This amount can be a family income, impartible land or income from the family estate.

4. Student Scholarships

Any student scholarship received to minimize the cost of education can be claimed under Section 10(16) for tax exemption. This benefit does not have a limit to the amount that can be claimed as tax-free income.

5. Education Loan

If you have taken an education loan for yourself or your spouse or your children, you can claim tax deductions for the repayment of the interest. This tax benefit is allowed under
Section 80E and cannot be used for claiming the repayment of the principal amount.

6. Donation

Any voluntary donations made to a religious group, governmental funds or charitable organization can be claimed under Section 80G. The claim amount for tax deductions ranges from half to full exemption.

Download Brochure


  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999


Browse our library of resources

Download Brochure


  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490


- A Consumer Education Initiative series by Kotak Life

Similar Articles

5 Popular Tax-Saving Schemes in India

Penalty For Late Filing TDS Return

Tax Saving Guide for 2019-20

Tax Benefits of ULIP Plans Available for NRIs

Income Tax Benefits for Doctors

What is Salary Protection Insurance and Why You Need It

How to View 26AS and Download Form 26AS Online?

When Should TDS be Deducted and Who is Liable to Deduct it?

What is Form 26AS - All You Need To Know

How can I get Form 16B from traces?

How to File Form 16 for Salaried Employees?

Tax Saving Options other than Section 80C

Can You Get Term Insurance Without Income Proof?

Impact of GST on Life Insurance in India

9 Point Guide on how to File Income Tax Return Online

What is TDS Exemption Limit?

Section 80G of the Income Tax Act

How to File TDS Return?

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

How To Save Tax Using Life Insurance?

How to Check Income Tax Refund Status Online in India

What is the Difference Direct Tax and Indirect Tax

Are Financial Planning and Tax Planning the Same Thing?

Understanding Tax Exemptions in ULIP (Old and New)

What is Challan 280? How to Pay your Income Tax Online with Challan 280?

Tax Deductions You MUST Know

Section 16 of the Income Tax Act (ITA), 1961

How to Get Form 16?

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

What is Section 80CCC of the Income Tax Act 1961

What is Form 16A?

Form 16, Form 16A, and Form 16B?

All about TDS on Salary under Section 192 – Kotak Life

Guide for Tax Calculation on your Salary

How to Save Income Tax with Insurance

How to File Income Tax Return without Form 16

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2020-21 & 2021-22

Income Tax Filing For NRI in India

A Complete Guide for Filing ITR 3 Form

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Top 8 Tax-Saving Methods in India- Budget Planning

Union Budget Highlights – 1st February 2022

All You Need to Know About Section 80C

What is Section 80C Deduction?

Tax Benefits for Startups in India

9 Income Tax Myths That Could Cost You Money while Filing returns

Financial Planning and Best investment options for Housewives

How to File Income Tax Return for First Time Tax Payers

How to View 26AS and Download Form 26AS Online

What is Section 10D of the Income Tax Act?

Types of Riders in Insurance Policy

How to Pay Advance Tax Online in India

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

TDS Due Dates of FY 2020-21 For Return Filing

Section 80C Deductions as per Income Tax Act, 1961

Why January Is an Important Month for Saving Tax?

ITR 2 Form – Complete Guide

What is the Percentage of Tax Deducted at Source (TDS)?

Tips to plan your savings in 2019

What is the TDS Rate on Salary?

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Problems People Face with Tax Returns after a Job Change

Role of Life Insurance in Your Financial Portfolio

What is TDS Refund Process?

What is Form 16B?

What Is Advance Tax and How Is It Calculated?

Tax Saving Tips: Best Ways to Save Income Tax for 2021

Why Tax Planning Should Be an All-year Round Activity

How to File ITR Online

ITR 1: Sahaj Form

What is ITR & How to File Income Tax Return

Tax-Savings Investments and Options in India

All about TDS Payment Online & Due Dates

Sub-sections Under Section 80C of the Income Tax Act, 1961

Guaranteed Return Plans-Why is it a must for you?

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

How to File Income Tax Return - Everything You Need To Know

Insurance and Endowment: Everything You Need to Know!

What is ITR 5 Form and How to File ITR 5?

Tax Exemption and Scope of Coverage

What is Section 80C Deduction Limit?

How to save tax for salaried person?

What are the Different Types of Taxes in India?

Tax Structure in India

आयकर स्लैब 2021-2022

What are Direct Taxes? How to Avoid being Overtaxed?

Income Tax Deductions Under Section 80C

What is TDS Slab?

What is the Difference between Form 16 and Form 16A?

How to Download Form 16?

7 Important Things to Remember While Investing in a Savings Investment Plan

Tax Benefit of Investing in Term Plan

What is Section 80C - Explained in Detail

9 Tax Changes in Budget 2019 that may Impact Your Personal Financial Planning

How to Save Tax on Salary Arrears?

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

Presumptive Taxation for Business and Profession

Tax Saving for Self Employed in India

Tax Saving Options for Salaried Employees

Difference Between Gross Income & Total Income in Calculating Income Tax

Section 44AD of Income Tax Act for AY 2020-21

Interest Imposed Under Section 234A, 234B and 234C

Budget 2019: Impact on the Common Man in India

Difference between Section 80C, 80CCC, 80CCD & 80D

How to File Form 10E for Tax Relief on Salary Arrears?

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

धारा 80डी आयकर अधिनियम, 1961

What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

How Much Money This Budget 2019 Can Help You Save

Pradhan Mantri Suraksha Bima Yojana

A Comprehensive Guide to Understand the ITR 7 Form

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

Income Tax Exemption for Disabled

What is Tax Deduction at Source (TDS)?

Saving Income tax in 2017 - 18

Save Income Tax by 31st March: Here Is a Checklist

Why is Form 16 Important?

ITR-6: Guide to filing ITR-6 Form online

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Home Investment Plan to Buy Dream Home

How to Check Income Tax Returns Status Onine?

How to e-Verify your Income Tax Return

What Investment Options Come with Tax Incentives?

E-Filing of Income Tax Returns in India

Income Tax Deductions for Disabled Person Under Section 80U

How to Claim TDS Refund for Excess TDS Deduction?

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

Income Tax Deduction Under Section 80CCC In India

How To Save Tax Better with 80C

Things to Do After Filing Income Tax Returns

Financial Benefits and Government Schemes Every Woman in India Should Know

Have You Considered Term Insurance a Part of Your Tax Planning?

How do I Calculate My Term Insurance Premium

List of Important Income Tax FAQs

Do Beneficiaries Pay Taxes on Life Insurance?

Income Tax Filing Using Multiple Form 16

धारा 80सी आयकर अधिनियम, 1961

All about Online Income Tax Calculator

What To Do If Your TDS Is Not Deposited With The Government?

How to file Form 16 online?

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

Tax-Free Income in India

Section 80E: Tax Exemption on Interest on Education Loan

Tax Planning and Tax Benefits of Life Insurance

Income Tax Exemption for Physically Handicapped Dependent

Investing Lump Sum Amount

How to e file ITR on Income Tax Government Portal

How to Check Income Tax Refund Status Online in India

5 Unusual Investments You Didn't Know for Saving Taxes in India

Types of Income Tax Return (ITR) Forms