Direct Taxes – Know How to Avoid Being Overtaxed - Kotak Life

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


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Kotak Assured Savings Plan

What are Direct Taxes? How to Avoid being Overtaxed?

Taxes that are levied by the government directly on the individuals are referred to as direct taxes. Direct taxes do not require any third-party intervention between the individual or the entity in question and the government. To know more, Visit Now.

  • Mar 10, 2021

Taxes are the funds that are collected by the government to fund a country’s growth and development. Paying taxes is an integral part of everyone’s life. The state or the central governments are the authorities that levy the taxes, which can be collected either as direct or indirect taxes. Indirect taxes are the ones which are levied on the services and goods that are sold to consumers while direct taxes are directly paid to the government by the citizens. Read on to understand direct taxes in detail.

What is the meaning of Direct Taxes?

A direct tax is levied on an individual’s income and is paid directly by an individual or an institution to the tax authorities. The individuals and the institutions that pay this tax cannot transfer the responsibility for the payment to another entity.

Some types of direct taxes are:

1.Income tax:

The tax that an individual, the member of a HUF (Hindu Undivided Family), or a business firm pays, based on the income tax slab they come under. This is a mandatory tax levied on one’s income from a business, capital gains and salary.

2.Corporate tax:

This is the tax levied on companies and business ventures that have generated earnings in the Indian market. Corporate taxation involves taxes like FBT (Fringe Benefit Tax), STT (Securities Transaction Tax) and DDT (Dividend Distribution Tax).

3.Capital gains tax:

A capital gains tax is levied on the profits or gains made through different investment instruments and value holdings. The holding period classifies this tax as either long-term capital gains tax or short-term capital gains tax and differs for different assets. This tax is due once the investment is sold.

4.Wealth tax:

The tax is levied on individuals, members of a HUF (Hindu Undivided Family) and corporate establishments on the profits or returns from real-estate ownership. Indian residents pay this tax on their global assets, whereas NRIs pay this tax for assets held in India.

While these are the different types of direct taxes levied on taxpayers, let’s look at how you can avoid being overtaxed.

Save Tax Now

Some ways you can avoid being overtaxed are:

1.Tax-saving investment options:

Investment options like fixed deposits, while being the conventional investments choices, attract taxes on the interest. The interest earned is taxed as income at the rate that is applied to the investor. Instead, you could look at more tax-efficient instruments like debt mutual funds. Debt funds provide you with the option to put off the tax payment until you withdraw your investment. If you hold them for three years, you also get the advantage of low tax. The income earned from these funds is treated as long-term capital gains after a span of three years and therefore, attracts less tax.

2.Deduction on rent:

You have the option of claiming a tax deduction on the House Rent Allowance (HRA) if you stay on rent and fulfil all the requirements for getting tax benefits. While there is no upper limit for this, there are some rules that cap maximum HRA deduction.

3.Growth option instead of dividend mutual funds:

Dividend distribution tax is a tax that a lot of investors pay without realising. These are levied on the dividends paid by mutual fund schemes other than equity and equity-related instruments. Here, a growth option is much more tax-efficient because the entire sum is not subject to taxation; only the capital gains are taxed.


Apart from the coverage you get with an insurance policy, insurance plans are also great tax-saving options. Under Section 80C of the Income Tax Act, the premiums paid on a life insurance policy are eligible for a tax deduction. Similarly, you can avail tax deduction for health insurance premiums under Section 80D of the Act.

If you are looking for better ways to handle your taxes, you can consider the Kotak Life tax-saving guide. Crafted by experts, you can use this guide to get crucial information on filing and saving taxes. Additionally, this guide aims to facilitate informed investment decisions that are based on personalised insurance needs of the policyholder.

Summing it up

A direct tax is levied on an individual or institution’s earnings, including capital gains, income, wealth and corporate tax. However, some of the ways you can reduce the amount of tax you pay are tax-saving investments, rent deduction, growth options and insurance policies. To conclude, one cannot avoid the responsibility of paying direct taxes. However, there are provisions to save money on direct taxes, which can lessen individuals’ financial burden.

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


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

How To Invest In Guaranteed Return Plans For Higher Returns And Financial Security?

Income Tax Deductions for Disabled Persons Under Section 80U

Tax Exemption and Scope of Coverage

Importance of Savings Plan You Need to Know

How to e file ITR on Income Tax Government Portal

Are Financial Planning and Tax Planning the Same Thing?

Tax Benefits of ULIP Plans Available for NRIs

Do Beneficiaries Pay Taxes on Life Insurance?

How To Save Tax Using Life Insurance?

Section 80C Deductions as per Income Tax Act, 1961

Understanding Tax Exemptions in ULIP (Old and New)

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

Financial Planning and Best investment options for Housewives

Money Saving Tips for Single Women

How to Pay Advance Tax Online in India

Home Investment Plan to Buy Dream Home

What is Tax Deduction at Source (TDS)?

How to Check Income Tax Refund Status Online in India

आयकर स्लैब 2021-2022

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

All about TDS on Salary under Section 192 – Kotak Life

How to Calculate returns on an assured savings plan?

What is a savings plan?

What is Form 16B?

Income Tax Benefits for Doctors

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

Income Tax Filing Using Multiple Form 16

आयकर रिटर्न (आईटीआर) फॉर्म के प्रकार

What is capital gains tax, and how it works?

धारा 80डी आयकर अधिनियम, 1961

Income Tax Deductions Under Section 80C

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

Things to Do After Filing Income Tax Returns

Tax Saving for Self Employed in India

What is Form 16A?

Income Tax Exemption for Physically Handicapped Dependent

ITR 2 Form – Complete Guide

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

Types of Income Tax Return (ITR) Forms

What is TDS Exemption Limit?

How can I get Form 16B from traces?

How to Save Tax on Salary Arrears?

धारा 80सी आयकर अधिनियम, 1961

Is PF Withdrawal Taxable for NRI?

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

Top 8 Tax-Saving Methods in India- Budget Planning

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

How to File Income Tax Return for First Time Tax Payers

How to File ITR Online

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

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

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

3 Tips to Buy Guaranteed Savings Plan

Basics of Guaranteed Savings Plan

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

What is Section 80C Deduction?

Types of Riders in Insurance Policy

How to Check Income Tax Returns Status Onine?

Penalty For Late Filing TDS Return

Budget 2019: Impact on the Common Man in India

Section 80E: Tax Exemption on Interest on Education Loan

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

What is Section 80C - Explained in Detail

What are Deferred Savings Plans?

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

Tax Benefits for Startups in India

How to File Form 16 for Salaried Employees?

Can You Get Term Insurance Without Income Proof?

What is the difference between TDS and TCS?

TDS rules on the sale of jointly owned property

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

Who Should Invest In Savings Plan

Best Savings plan for the middle class in India

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

What is indirect tax and its types?

Tax Deductions You MUST Know

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2021-22 & 2022-23

Tax Planning and Tax Benefits of Life Insurance

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

Post Office Savings Scheme - All You Need to Know

सुकन्या समृद्धि योजना (SSY) के कर लाभ क्या हैं?

Tax Season is Coming- Know How to Save Tax

Union Budget Highlights – 1st February 2022

भारत में महिलाओं के लिए सरकारी योजना

What is Section 10D of the Income Tax Act?

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

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

Easy ways to make personal savings plans

What is Rule 132 of Income Tax? How Does it Affect You?

Insurance and Endowment: Everything You Need to Know!

What is Section 80CCC of the Income Tax Act 1961

A Complete Guide for Filing ITR 3 Form

What is TDS Slab?

List of Important Income Tax FAQs

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

Income Tax Filing For NRI in India

How to View 26AS and Download Form 26AS Online

How to create wealth through a savings plan?

How to create a savings plan and make good investment choices

How To Save Tax Better with 80C

All You Need to Know About Section 80C

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

E-Filing of Income Tax Returns in India

इनकम टैक्स रिटर्न कैसे फाइल करें?

Tax Saving Guide for 2019-20

How to file Form 16 online?

What is the Maximum Maturity Benefit in Assured Savings Plans?

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

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

What are the Different Types of Taxes in India?

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

Tax Saving Options for Salaried Employees

8 Things to Help You Select a Savings Investment plan

Income Tax Exemption for Disabled

Why is Form 16 Important?

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

What Investment Options Come with Tax Incentives?

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

How to Boost Your Savings with Guaranteed Results

What is EEE in income tax? 5 tax-free investment options to become crorepat

Pradhan Mantri Suraksha Bima Yojana

Section 80G of the Income Tax Act

How to File TDS Return?

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

Difference Between Guaranteed and Assured Returns

All You Need To Know About Assured Savings Plan

Tax Saving Options other than Section 80C

What is Form 26AS - All You Need To Know

Impact of GST on Life Insurance in India

Tax Benefit of Investing in Term Plan

Income Tax Deduction Under Section 80CCC In India

All about TDS Payment Online & Due Dates

What is ITR & How to File Income Tax Return?

Problems People Face with Tax Returns after a Job Change

Presumptive Taxation for Business and Profession

A Comprehensive Guide to Understand the ITR 7 Form

Why Tax Planning Should Be an All-year Round Activity

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

Tax Structure in India

How much gold can you keep at home? Limits and income tax rules explained

Section 44AD of Income Tax Act for AY 2021-22

प्रत्यक्ष कर और अप्रत्यक्ष कर में क्या अंतर है?

Guide for Tax Calculation on your Salary

5 Popular Tax-Saving Schemes in India

How to Check Income Tax Refund Status Online in India

How Much Money This Budget 2019 Can Help You Save

Should you prefer a Guaranteed Savings plan over monthly income schemes?

What is the TDS Rate on Salary?

What is Salary Protection Insurance and Why You Need It

What is TDS Refund Process?

What is Section 80C Deduction Limit?

What is the Difference between Assessment Year (AY) and Financial Year (FY)?

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

How to e-Verify your Income Tax Return

How Do Assured Savings Plans Work and Why You Should Consider One?

What is the Difference Direct Tax and Indirect Tax

Saving Income tax in 2017 - 18

Excess TDS Deduction – Claim TDS Refund

What Is Advance Tax and How Is It Calculated?

How to Get Form 16?

Tax-Free Income in India

How Should I Allocate A Monthly Savings Plan For Long-Term Benefits?

All you need to know About Tax on Inheritance

Tax-Savings Investments and Options in India

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

How to File Income Tax Return without Form 16

ITR 1: Sahaj Form

Tips to plan your savings in 2022

Should one prefer a guaranteed savings plan over monthly income schemes?

Financial Benefits and Government Schemes Every Woman in India Should Know

9 Unusual Investments you Didn't Know for Saving Taxes in India

TDS Due Dates of FY 2022-23 For Return Filing

Income-Tax Liability- The Difference Between Gross Income & Total Income in Calculating Income Tax

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

Investing Lump Sum Amount

Challan 280 - How to Use Challan 280 to Pay Income Tax

How to Download Form 16?

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

How to save tax for salaried person?

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

Why January Is an Important Month for Saving Tax?

How can NRIs prevent double taxation in India?

How to Save Income Tax with Insurance