Language

Call us

/content/dam/tataaialifeinsurancecompanylimited/navigations/new-call-us/Close.png

starFOR EXISTING POLICY

Have query on premium, payout or any servicing need?

Dedicated NRI Helpdesk:

Call Icon +91 22 6251 9966

Monday - Saturday | 10 am - 7 pm IST
Call charges apply

Plus IconFOR NEW POLICY

Want to buy a new policy online?

For Indian Residents

Call Icon +91 22 6984 9300

Give missed call for a call back:

Call Icon +91 11 6615 8748

Monday - Sunday | 8 am - 11 pm IST

Exclusively for NRIs

Initiate Internet Call

Data charges may apply

Give missed call for a call back:

call +91 11 4473 0242

Available All Days | 24 x 7

Back Arrow Icon
Close Button
Back Arrow Icon
Close Button

Need assistance in choosing the right insurance plan? Get a call from our Expert.

Need assistance in choosing the right insurance plan?Get a call from our Expert.

+91 dropdown arrow

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. T&C apply.

Which are the Best Tax Saving Instruments in India?

We all work tirelessly and endure several fluctuations in our work life to ensure a comfortable living for ourselves as well as our loved ones. In our journey towards progressive wealth creation, it becomes crucial to plan finances to sustain over unforeseeable circumstances and achieve personal financial goals. By reducing tax liabilities, not only an individuals can reduce their financial burden but also avail benefits to secure their future permitting greater control of the money earned. Considering this, every individual, whether they are just starting with their career or are progressively climbing up the ladder, will be faced with two pertinent questions that are: 

 

  • How can I reduce my taxable income?
  • What is the maximum tax I can save? 

 

To answer the above questions, it is important to invest in tax-saving instruments right from the beginning,  not to be overburdened at the end of the financial year. The Indian Income Tax Act, 1961 hosts a Section 80C permitting taxpayers across the country to deduct from their gross income of up to ₹1.5 Lakh per annum on eligible investments and specified expenses. It is important to not only know the various kinds of tax-saving instruments but to identify and link them to your personal financial goals. For ease of understanding and to help you analyse, which is the best investment option for tax-saving, we have detailed out Section 80C of the Indian Income Tax Act.

 

How to Lower Your Taxable Income with Section 80C?

     

 

1. Life Insurance 

 

Life is defined by its moments of uncertainties, and life insurance allows you to prepare for these events by ensuring a financially secure future for your loved ones. Under Section 80C and 10D of the Income Tax Act, purchasing life insurance has tax benefits that can be availed by the insurer.

The premiums paid towards a life insurance policy qualify for a deduction up to ₹1.5 Lakh. Moreover, the sum guaranteed upon the maturity of the policy is also exempt from tax as is the death benefit, should the policy come into action.

In case you are on the lookout for an affordable health care policy, purchasing term life insurance presents itself as a reasonable option that secures you financially for the duration of the term. Check out the wide range of Protection Plans from Tata AIA for affordable and feature-rich term insurance plans.

 

2. Savings + Insurance Plans

 

Tata AIA has gone a step further by acknowledging that a sound financial plan is one that combines insurance with other aspirations. With a range of services under its Savings Solutions, Tata AIA helps combine specific needs like saving for marriage, a house, retirement and other financial goals with insurance for wholesome financial wellbeing. You can choose from a range of Savings Plans that guarantee a specific income or return after a certain period of time, along with comprehensive whole life cover.

 

3. Unit Linked Insurance Plan (ULIP)

 

ULIP is best suited for those who are looking for a long-term financial plan of wealth creation paired with insurance. A certain amount of the money you invest, secures your life, whereas the other portion is invested in the market. The risk of investment is borne by the capital holder, and so the investor ought to weigh their risks and judge the future needs for funds. It is most suited for investors who like to keep a close watch on their investments, have a varying risk profile, and are looking for a long-term investment horizon.

Tata AIA Life Insurance offers a range of Unit Linked Life Insurance Savings plan that focuses on steady wealth creation and can be customised to address your desired financial goals. It is a hybrid between insurance and investment, ensuring the best of both worlds.

 

4.  National Pension Scheme (NPS)

 

The NPS is a contribution-based retirement saving scheme that can be availed by both salaried as well as self-employed individuals. Investment in the NPS of up to ₹1.5 Lakh qualifies for an income tax deduction. The NPS also allows for two investment choices: 

 

  • Active investment choice: Allows the investor to decide where to invest. There are three options to choose from. The first one is Asset Class E which is investing 50 per cent in stocks. Asset Class C invests in fixed income other than government securities, and lastly, Asset Class G is only investing in government securities. An individual could either choose one or can select a combination of these to invest their funds in.
  • Auto choice or lifecycle fund: With this, the money is automatically invested considering the age of the subscriber

 

As this is a pension scheme, at the age of 60, of the accumulated corpus 40 per cent is exempted from tax; however, the rest is taxable unless invested in purchasing an annuity pension plan from a PFRDA-listed insurance company. You are also permitted a withdrawal of up to 25 per cent before the age of 60 for specific expenses such as marriage, higher education of children, medical treatments, etc. 

 

5. Public Provident Fund (PPF)

 

One of the most popular government-backed schemes in India, PPF is opted for by individuals who are looking for a long-term investment plan. The PPF owes its popularity to its favourable tax-saving status as the contributions, interest earned as well as the maturity proceeds are eligible for a tax deduction. The minimum investment required to avail of this scheme is ₹500, and the maximum is ₹1.5 Lakh per financial year. The money invested in this scheme is subject to a five-year lock-in period and earns an interest of 7.9% per annum. This is the best kind of investment for conservative and low-risk investors.

 

6. National Saving Certificate (NSC)

 

A fixed-income investment scheme, the NSC is a savings bond and can be subscribed at the post office. It is a low-risk investment initiative by the Government of India and has a fixed maturity period of five years. The NSC offers a guaranteed interest and complete capital protection. The minimum investment requirement is ₹100, and the interest accrued yearly is reinvested on behalf of the investor and qualifies for a deduction under Section 80C. One thing to keep in mind is that as the fifth year’s interest is not reinvested, it cannot be claimed for a tax deduction. The last year’s interest income is added to the investor’s income and is taxed accordingly.

 

7. Equity Linked Saving Scheme (ELSS)

 

This is a mutual fund scheme investing in equity and equity-related instruments to generate high returns. The scheme comes with a statutory lock-in period of three years. As the underlying assets are equity securities, the investor needs to have a high-risk profile. It has been observed, however, that this scheme provides a high capital growth opportunity in the longer run.

 

Beyond Section 80C
 

If you are still looking for tax-saving investment avenues, there are several tax-saving instruments other than 80C to look out for.

 

  • Over and above the aforementioned deductions, paying health insurance premiums under section 80D permits for a deduction of up to ₹25,000.
  • Additionally, you can also claim for a tax deduction on your house rent allowance or get a deduction on the interest on your home loan as also for repayment of an educational loan.
  • Keeping money in your savings account also allows for a tax deduction under the section 80TTB for an interest of up to ₹10,000 per year.
  • Donations made to government-approved charitable institutions are also exempted from tax.

 

To conclude, although tax saving is a priority, most financial experts agree that it should be paired with a long-term financial goal. This ascertains that while you are saving on taxes, you are also focused on wealth creation. Efficient financial planning begins at the start of the financial year and not at its conclusion.

 

Tata AIA life insurance aims to guide you every step of the way to secure your financial future so you can enjoy the golden years of your life in a worry-free manner.

 

L&C/Advt/2021/Mar/0307

Get complete protection at affordable cost & tax benefits

+91 dropdown arrow
  • +93 Afghanistan

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 buy a new insurance plan?

Our experts are happy to help you!

+91

Select plan
  • Term plans
  • Saving plans
  • Retirement plans
  • Wealth plans
  • I don't know/I need help

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

How Can I Earn Rs.100 Per Day?
Read More
How to Download Covid Vaccination Certificate with Aadhaar Number
Read More
How To Download Pmjjby Certificate Online | TATA AIA Blog
Read More
Income Tax Rebate Under Section 87A - Your Complete Guide
Read More
How to Close Your PF Account Permanently
Read More
Withdraw Pension Contribution in EPF Online - Step-by-Step Process
Read More
How to Withdraw PF Online After Leaving Job
Read More
Common Reasons Why Your Online EPF Claim is Being Rejected
Read More
How to Download Form 15G for PF Withdrawal | Tata AIA Blog
Read More
TDS on Sale of Property by NRI in India | Tata AIA Blogs
Read More

People Like You Also Read

How Can I Earn Rs.100 Per Day?
Read More
How to Download Covid Vaccination Certificate with Aadhaar Number
Read More
How To Download Pmjjby Certificate Online | TATA AIA Blog
Read More
Income Tax Rebate Under Section 87A - Your Complete Guide
Read More
How to Close Your PF Account Permanently
Read More
Withdraw Pension Contribution in EPF Online - Step-by-Step Process
Read More
How to Withdraw PF Online After Leaving Job
Read More
Common Reasons Why Your Online EPF Claim is Being Rejected
Read More
How to Download Form 15G for PF Withdrawal | Tata AIA Blog
Read More
TDS on Sale of Property by NRI in India | Tata AIA Blogs
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
  • 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 on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.The fund is managed by Tata AIA Life Insurance Company Ltd. (hereinafter the “Company”).

  • Insurance cover is available under the products.

  • This document 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. This document 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 document 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.

  • The products are underwritten by Tata AIA Life Insurance Company Limited. The plans are not guaranteed issuance plans and it will be subject to the Company’s underwriting and acceptance.

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