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Tax Planning: Tax Saving Plans you need to know

, January 27, 2016, 0 Comments

tax-saving-plans-tax-planning-marketexpress-inIt’s that time of the year when you start planning on how to save on your taxes. You research for each and every option available to gain tax benefits; we’ve made  Following are some tax saving options that you can avail and gain benefits –

Life Insurance

Life insurance offers financial security to an individual’s family in case of any unprecedented event leading to the death of the individual. Great thing about opting for Life Insurance is that it offers tax benefits.

Types of Life Insurance plans are –

  • Term Plans
  • Unit Linked Plans
  • Money Back plans
  • Endowment plans

Taxes saved in life insurance are covered under Section 80C of the Income Tax Act up to a maximum of Rs 1.5 lakhs.

Pension Plans

Another form of life insurance is pension plans. The end objective is a bit different, while life insurance plans offers financial protection after the individual’s death, a pension plan provides financial security to the individual and his family after he retires from his job.

Taxes saved in Pension plans are covered under Section 80CCC (sub-section under section 80C) of the Income Tax act.

Health Insurance

Health Insurance is also popularly known as Mediclaim, it covers the expenses incurred due to an accident or any illness. Health Insurance also covers pre and post-hospitalization expenses depending on sum assured.

Taxes saved in health insurance are covered under Section 80D of the Income Tax Act.

NPS

The New Pension Scheme (NPS) is regulated by the Pension Funds Regulatory and Development Authority (PFRDA). The NPS can be availed by any citizen of India within the age bracket of 18-60 years. Fund management charges are low making it extremely cost effective.

Taxes saved in NPS are covered under Section 80CCD of the Income Tax Act.

ELSS

ELSS or Equity Linked Saving Scheme is a type of mutual fund scheme. As the name suggests, ELSS invests its corpus in equity and equity related products. ELSS has tax benefits attached to it and taxes saved in this scheme are covered under Section 80C of the Income Tax Act.

RGESS

RGESS or Rajiv Gandhi Equity Saving Scheme is similar to ELSS; it’s a scheme for first time investors earning an annual income of more than Rs 10 lakhs. Taxes saved in this scheme are covered under Section 80CCG of the Income Tax Act.

Hurry! Start planning today! Click here to learn more about tax saving plans.

 

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