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The tax that you pay on your income is a variant of direct taxes, known as income tax. An efficient tax planning aids in reducing your tax burden. You pay taxes for a financial year that spreads across April to March. Rather than waiting for the last quarter, you must plan your investments at the start of the financial year.
You may have questions like –
To say, investing in appropriate plans, aids in reducing the tax liabilities. Moreover, investing also helps in achieving your financial objectives. Thus a suitable investment plan has the added advantage of saving taxes.
Paying taxes on income is the duty of every responsible citizen. Besides, the law allows you to save some of your tax liabilities by making permissible investments. Thus, by resorting to tax planning, you can legally reduce the tax burden.
There are many investment options available in the market. You must start with tax planning early, to have enough time to assess these avenues. It thus enables in selecting the most appropriate investment product in line with your preferences. Hence, if you are wondering how to save income tax by investment - tax planning is the answer. It allows you to enjoy the benefits of Section 80C of the Indian Income Tax Act, 1961.
Section 80C of the Income Tax Act states the investments and expenditures that are eligible for deduction. The permissible amount gets deducted from your Gross Total Income (GTI). But, under 80C, how much can we save?
Currently, the section permits deduction of up to ₹1.5 lakh. This, in turn, reduces your overall tax liability. For example, in a particular financial year, your GTI is ₹15 lakh. Assuming the entire allowable deduction under 80C, your tax liability gets computed on ₹13.5 lakh and not ₹15 lakh. This is how you can enjoy a reduced tax liability.
The Section has numerous investment options that are eligible for deduction. Besides, multiple market participants offer various tax-savings instruments. Tax saving should not be the sole intention; you must invest keeping in mind your needs and the creditability of the respective participant.
TATA AIA Life Insurance is one of the renowned and reputed names in the financial industry. It offers customised financial products to suit your preferences. It classifies each of these under protection, wealth, savings and retirement solutions. The premium paid is deductible from your total income, subject to compliance of Section 80C@.
Each product offering is exclusively designed for suiting specific needs. You may consult a TATA AIA Life Insurance professional for understanding the key features in line with your financial objectives.
Life insurance as a tax-saving instrument can aid in achieving financial security. It not only covers your life, but it can also take care of your family’s needs. Besides, it can also aid in achieving your financial objectives. This is why it is important to plan your taxes and invest early.
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