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 –
- How to save income tax?
- How can I reduce my taxable income?
- How to save tax for salaried employees?
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.
Why is Tax Planning Important?
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.
What is Section 80C of the Indian Income Tax Act?
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.
What Are the Investment Plans Under Section 80C?
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@.
- Protection Solutions - Your family depends emotionally and financially on you. It is difficult to imagine their life without you. Moreover, if you are the sole earning member of the family, it will undoubtedly be a difficult situation for your family. Facing financial stress while coping up with the grief of loss can be devastating. Hence it is important to get your life covered. Life insurance extends financial support to your family during such unfortunate times. The product portfolio here includes:
- Wealth Solutions - This includes the Unit Linked Insurance Plan (ULIP). A ULIP* is a two-fold product, having a mix of insurance and market-linked investment. The premiums are utilised towards covering your life and for making investments. You choose where the funds should be invested. It could either be in equity, debt or a combination of both. Further, you can also subsequently switch your investment plan as per the changing needs. Thus ULIP can support long-term goals like retirement and children’s education or marriage. The list of tailor-made plans under this product classification are:
- Savings Solutions - This is a non-linked life insurance saving plan. It offers life coverage and guaranteed returns. As it is not linked to the markets, it provides stable returns. The non-linked insurance plan is advisable for those having a limited risk appetite. This investment avenue is thus an effective tool for managing your long term goals like the purchase of a house and generation of retirement corpus. Plans under this category include:
- TATA AIA Life Insurance Guaranteed Return Insurance Plan (UIN: 110N152V07)
- TATA AIA Life Insurance Guaranteed Monthly Income Plan (UIN: 110N147V02)
- TATA AIA Life Insurance Diamond Savings Plan (UIN: 110N133V02)
- TATA AIA Life Insurance Gold Income Plan (UIN: 110N131V02)
- TATA AIA Life Insurance Smart Income Plus (UIN: 110N126V04)
- TATA AIA Life Insurance Money Back Plus (UIN: 110N119V02)
- TATA AIA Life Insurance MahaLife Gold (UIN: 110N029V03)
- TATA AIA Life Insurance Fortune Guarantee (UIN: 110N120V08)
- TATA AIA Life Insurance Value Income Plan (UIN: 110N153V01)
- TATA AIA Life Insurance POS Smart Income Plus (UIN: 110N148V02)
- TATA AIA Life Insurance Fortune Guarantee Plus (UIN: 110N158V01)
- Retirement Solutions - Life coverage and retirement planning give a sense of financial security. Not having to worry about regular expenses lets you live a comfortable retired life. You need not compromise on your standard of living post-retirement by planning your investments promptly. The plans captured above, like TATA AIA Life Insurance Guaranteed Monthly Income Plan (UIN: 110N147V02), can help in retirement planning.
You can also opt for the Tata AIA Life Insurance Smart Annuity Plan (UIN: 110N150V05) that offers seamless annuity options that help you streamline your post-retirement expenses by earning a regular income. You can choose your annuity payment and payout modes as per your specific financial requirements and goals.
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.
- @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.
- *IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. 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.
- The products are underwritten by Tata AIA Life Insurance Company Limited. The plans are not guaranteed issuance plans, and they will be subject to the Company’s underwriting and acceptance.
- 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.
- For more details on risk factors, terms and conditions, please read the Sales Brochure carefully before concluding a sale.
- Tata AIA Life Insurance Company Limited (IRDAI Regn. No.110 • CIN: U66010MH2000PLC128403). Registered & Corporate Office: 14th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Trade logo displayed above belongs to Tata Sons Ltd and AIA Group Ltd. and is used by Tata AIA Life Insurance Company Ltd under a license. For any information including cancellation, claims and complaints, please contact our Insurance Advisor / Intermediary or visit Tata AIA Life’s nearest branch office or call 1-860-266-9966 (local charges apply) or write to us at firstname.lastname@example.org. Visit us at: www.tataaia.com.
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