FOR EXISTING POLICY

Have query on premium, payout or any servicing need?

Call us:

1 860 266 9966

Monday - Saturday | 10 am - 7 pm IST

Call charges apply

FOR NEW POLICY

Want to buy a new policy online?

Call us:

+91 22 6984 9300

Give missed call for a call back:

+91 11 6615 8748

Monday - Sunday | 8 am - 11 pm IST


Exclusively for NRIs:

+91 11 4473 0240

Monday - Sunday | 9:30 am - 9 pm IST

7 Saving Instruments That Can Help You Cut Your Tax Outgo

26-April-2022 |

When we enter the workforce, we work hard to build a financial net for ourselves and our families. The safety net that we build with our hard work will help us achieve our long-term financial goals, protect our families and build a secure future for ourselves. However, as you advance in your career, your income increases and so does your tax* liability.

The Income Tax Act contains many provisions in the form of exemptions and deductions. You should be aware of these to reduce your tax liability to an optimum level. Read on to find out more about some tax-saving instruments that make good savings sense. 

Many of us procrastinate with our tax planning and generally begin when the financial year is coming to an end. As there is less time available, we allocate our funds recklessly in offline or online investments. However, an awareness of the tax-saving investment options will help you in planning. 

Here are seven savings instruments that can help you cut your tax outgo:

  1. Public Provident Fund (PPF):

    PPF is a long-term savings scheme that includes tax-saving to help investors build a financial safety net after retirement. The PPF has a minimum period of 15 years, extended in blocks of 5 years.

    A PPF account allows a minimum investment of Rs. 500 and a maximum investment of Rs. 1.5 lakh for each financial year. All deposits made in a PPF account are deductible under Section 80C of the Income Tax Act (ITA).

    In addition, the interest and accumulated amount from the PPF are also exempted from tax during withdrawal.

  2. National Pension Scheme (NPS):

    The Central Government runs the National Pension Scheme as a pension program for private, public and organized sectors. It encourages people to invest in a pension account at regular intervals during their employment. The scheme later pays the accumulated amount as a monthly pension to the account holder. The NPS provides tax exemption under the sections mentioned below:

     

    • If 10% of the individual's salary is contributed to the NPS, the amount will not be taxed. 

    • As per Section 80CCD (1b), individuals can get an additional deduction of up to Rs. 50,000. 

    • Any contribution up to Rs. 1.5 lakh as the maximum limit can be claimed for tax exemption under Section 80C of the Income Tax Act. 

  3. Senior Citizen Savings Scheme (SCSS)

    The Senior Citizen Savings Scheme is a government-supported tax-saving investment scheme. It was specifically designed to provide financial safety to senior citizens. People above 60 years are eligible to invest in the scheme.

    This scheme allows individuals to make a one-time deposit: minimum Rs. 1000 and maximum Rs 15 lakh (in the event of joint holding) and Rs. 9 lakh (in single holding). Hence, the investment cost in the scheme is quite flexible. In addition, Section 80C of the Income Tax Act allows a tax deduction of Rs. 1.5 lakhs per annum. 

  4. Tax-saving Fixed Deposit (FD):

    These fixed deposits are security deposits that are similar to other guaranteed1 return investment choices. The only difference is that the period of the investment in the FD is five years. In addition, the FDs offer tax deduction under section 80C Thus, they are optimal plans for individuals with a low-risk appetite who want to save money over a long-term period.  

  5. Savings Insurance Plan:

    A savings insurance plan is an insurance plan that provides you with an opportunity to save and accumulate a fund for the future. The investment will help the individual invest their funds in a disciplined and systematic way which will help them achieve their long-term and short-term financial goals in life.Additionally, the plan also provides life insurance protection for your loved ones

    Along with this, the premiums paid towards the savings insurance plan qualify for tax* deduction under Section 80C of the Income Tax* Act. Savings-cum-insurance plans are considered one of the options for life insurance policies in India, due to the dual benefits of assured returns and life cover, along with features like an insurance for critical illness, rider# options, etc.

    TATA AIA life insurance provides extensive features like the ability to get joint life coverage with a single premium and choose the payout options in their savings plans. You can further enhance the policy coverage with a choice of unique riders#.

  6. Equity Linked Savings Scheme (ELSS):

    The Equity-Linked Saving Scheme is a diversified mutual fund scheme. These funds invest in the equity and equity-related securities of the company across the market segment. These investment instruments have two distinct features.

    Firstly, the investment amount used for investing in this scheme is eligible for tax deduction up to the maximum limit of Rs. 1.5 lakh as per Section 80C of the ITA. Secondly, investments made in ELSS have a lock-in period of 3 years. These funds provide an interest rate of 15%-18%. But, the returns on these plans are not fixed and will depend on the fund’s market performance.

    Investors can go for growth or dividend options in the ELSS fund as per their requirements. These tax-saving instruments provide liquidity and flexibility. 

  7. National Savings Certificate:

    National Savings Certificate is a fixed-income scheme. It is a savings bond that encourages subscribers to invest while they save on income tax. They are similar to PPF as they are quite secure and are considered low-risk products.

    You can get a National Savings Certificate (NSC) from your nearest post office. Investments of up to Rs. 1.5 lakh in the NSC will provide you with a tax rebate as per Section 80C of the ITA. Along with this, the interest earned on the certificates is also added to the initial investment and will qualify for a tax break. 

  8. As evident from the list above, you can rely on these tax-saving instruments to protect yourself and your hard-earned funds from tax liabilities. However, it is important that you carefully research these investments before purchasing them. 

Summing up:

Hence, if you're a tax-paying citizen of the country, you must learn about some ways you can reduce the amount paid through tax. You can pick any of the instruments listed above. However, you must be careful in planning your savings not with the intention of mere tax exemption but to ensure you have a sturdy financial future. 


L&C/Advt/2022/Apr/0855

Looking for a financial solution to save tax? Speak to our expert

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Need more information?
Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 
Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Need more information?
Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 
Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

People Like You Also Read

Salary Structure to Help You Save on Income Tax | Tata AIA Blog
Read More
Beginner's Guide to Tax Slabs in India
Read More
How Can You Grow Wealth and Save Tax Simultaneously?
Read More
How Can Life Insurance be an Effective Tax Planning Tool for You?
Read More
8 Things You Must Know About Tax Saving | TATA AIA Blog
Read More
5 Tax Saving Tips for Rookies in Corporate World
Read More
How to Calculate Your Income Tax Based on Tax Slab?
Read More
7 Saving Instruments That Can Help You Cut Your Tax Outgo
Read More
Six Mistakes to Avoid for Tax Saving
Read More
How Can Life Insurance Help You Save Tax?
Read More

Need more information?
Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 
Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

People Like You Also Read

Salary Structure to Help You Save on Income Tax | Tata AIA Blog
Read More
Beginner's Guide to Tax Slabs in India
Read More
How Can You Grow Wealth and Save Tax Simultaneously?
Read More
How Can Life Insurance be an Effective Tax Planning Tool for You?
Read More
8 Things You Must Know About Tax Saving | TATA AIA Blog
Read More
5 Tax Saving Tips for Rookies in Corporate World
Read More
How to Calculate Your Income Tax Based on Tax Slab?
Read More
7 Saving Instruments That Can Help You Cut Your Tax Outgo
Read More
Six Mistakes to Avoid for Tax Saving
Read More
How Can Life Insurance Help You Save Tax?
Read More
Website Logo Image Icon

Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Disclaimer
  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • * Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility for tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch

  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry

Need more information?
Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 
Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.