Insurance got you feeling like a fish out of water? Drop us a question and our team will cast a net of knowledge. Join the thousands who've found answers with us!
I want to understand if there are any investment plans which can help in tax savings?
Premium paid on Life Insurance plans are eligible for deduction from taxable income under section 80C up to a combined limit of Rs 1,50,000 per annum (as long as the sum assured on the plan is 10 times or more than the premium being paid). One must then hold these policies for a minimum period (2-5 years) to ensure that the tax benefit so obtained is not forfeited. Contribution to NPS is also eligible under 2 segments - within section 80C under the overall limit of Rs 150,000 as well as under section 80CCD that is exclusive to NPS up to a limit of Rs 50,000. The third class of investments for considering tax benefits could be payments for annuities. They are also eligible for deduction from taxable income under section 80 CCC although it is carved from within the Rs 1,50,000 limit offered to Sections 80C and 80CCD. There is thus an opportunity to save up to Rs 2,00,000 per annum on taxable income through investments in these instruments.
