Insurance Plans To Save Tax: today where you have to pay tax for everything you do, saving tax becomes complicated, but relax there are a lot of schemes available that will help you save a lot of tax.
Today we have listed 3 Best Insurance Plans To SAVE TAX In India so that you can also save tax easily and we have also mentioned the section under which you can do the same. (INSURANCE PLANS TO SAVE TAX)
3 Best Insurance Plans To SAVE TAX In India
3 Best Insurance Plans To SAVE TAX In India
3 Best Insurance Plans To SAVE TAX In India are are follows:
LIFE INSURANCE
Insurance Plans To Save Tax: The life insurance policy covers the risk of your death. if you die, then the insurance policy provides financial help to your family members.
You can get tax exemption under section 80C of the Income Tax Act, 1961 on the premium you pay for a life insurance policy for the entire financial year. In this section, you can get a tax exemption on investments up to Rs 1.5 lakh.
If you have invested in an annuity plan of LIC or any other insurance company to get a pension, then you can get tax exemption under section 80CCC of the Income Tax Act 1961. In this section, you can get a tax exemption on investments up to Rs 1.5 lakh. (INSURANCE PLANS TO SAVE TAX)
If you have received any amount from the insurance company, then you can get a tax exemption on it under section 10D of the Income Tax Act, 1961. Under Section 10D, you can get tax exemption on Sum Assured and Bonus on the maturity of LIC policy or in case of death of the person buying the insurance.
Please note that if you have purchased a policy from LIC or any other insurance company before March 31, 2012, you can get an income tax exemption on a 20% annual premium of the sum assured.
Similarly, if the insurance policy is purchased after this period, then you will get the benefit of tax exemption only on the 10% annual premium of your Sum Assured.
NATIONAL PENSION SYSTEM (NPS)
Insurance Plans To Save Tax: National Pension System (NPS) is also one of the many tax-saving options. Section 80CCD of the Income Tax Act provides the benefit of a tax deduction on the NPS account. NPS is an investment scheme of the government and the Pension Fund Regulatory and Development Authority (PFRDA) for government and private sector employees.
In this, a lump sum retirement fund and later annuity benefit are available to the person on reaching 60 years of age by investing during the tenure of the job. (INSURANCE PLANS TO SAVE TAX)
Subsection 80CCD (1) of section 80CCD provides tax exemption on deposits in this pension scheme. Salaried employees can get exemption up to 10 percent of their salary and self-employed person by depositing up to 20 percent of their total income in the pension account, subject to a maximum of Rs 1.5 lakh.
Apart from this, there is also another sub-section 80CCD (1B), under which both the salaried employee and the self-employed person can take advantage of additional tax exemption by depositing in the NPS account on their behalf. It will be up to Rs 50,000.
Employer’s contribution also benefits
Insurance Plans To Save Tax: An employee can also claim a tax deduction on the contribution made by the employer in the NPS account. All such will be under section 80CCD(2). The employer’s contribution can be equal to or more than 10 percent of the salary of the employee.
Who can take advantage of NPS
Insurance Plans To Save Tax: Any salaried person between the age of 18 to 60 years can join the National Pension System (NPS). Earlier it was only for government employees, but in 2009, the scheme was opened for those working in the private sector. The account can be opened by visiting any nearest bank branch.
Tax Saving: Tax deduction is also available on the cost of treatment, section 80DDB helps; conditions apply
Remember This Condition
There are two types of accounts in NPS Tier-I and Tier-II. Tier-I is a retirement account, which is mandatory for every government employee to open. On the other hand, Tier-II is a voluntary account, in which any salaried person can start investing and withdraw money at any time.
To get a tax deduction on NPS Tier 1 account, a minimum contribution of Rs 6000 annually or Rs 500 per month is required in the account. At the same time, a minimum contribution of Rs 2000 annually or Rs 250 monthly is required to claim a deduction on NPS Tier 2 account.
HEALTH INSURANCE
Section 80D of the Income Tax Act: To encourage citizens of India to opt for medical insurance policies, the Income Tax Department allows an individual to avail of the tax deduction for premium payment of health insurance policies for self and family under Section 80D of the Income Tax Act.
Insurance Plans To Save Tax: This deduction can be availed regardless of the fact whether your parents or your children are dependent on you. Under this Act, a person can claim an additional tax-saving benefit of up to Rs 50,000 on premiums paid for health coverage received by his parents.
Who are eligible to avail of income tax deduction on medical insurance premium under section 80D of ITA
insured:
- their spouse
- their children, and
- their parents
Let us understand how tax deduction works with the help of an example:
Insurance Plans To Save Tax: Suppose, you have a family of five members, you (38 years), your wife (35 years), a child (8 years), your father (68 years), and your mother (60 years). You and your family are covered under Family Floater Health Insurance, where you pay Rs. Pays an annual premium of 30,000. On top of this, you pay 18,000 annually for preventive health check-ups. Thus, the final amount paid by you will be equal to Rs 48,000.
So, in this case you can earn Rs. 35,000 (Rs 30,000 + Rs 5,000) are eligible for health insurance tax benefits under 80D.
Make health your top priority banner
Section 80D D B: Individuals who incur expenditure on medical treatment of specified diseases or ailments are eligible to claim tax deduction under section 80DDB.
Who are eligible to avail income tax deduction on medical insurance premium under section 80D of ITA
insured:
- their spouse
- their children, and
- their parents
- HUF (Hindu Undivided Family)
conclusion
Insurance Plans To Save Tax: If you are looking to plan your finances, health insurance is a must in your investment portfolio. The government encourages everyone to buy medical insurance and allows them to avail of a tax deduction on it under various sections.
If you are looking forward to planning your finances, having health insurance in your investment portfolio is a must. The government encourages everyone to avail of health insurance tax benefits under various sections mentioned above.
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