The tax-saving season is in full swing. But just buying any insurance plan isn’t brainy to save you enough tax. You need to know how you can bring the cream out of your insurance savings policy.
Though, the best method is through maximum savings and the least amount of tax payout from your income. Here, we’re highlighting some of the investment tricks that not only make you investment look worthy; it can assure you enough tax savings and returns.
Life Insurance Schemes
When buying insurance, keep one thing in mind, look to maximize your cover, not returns. The maximum investment depends on the terms of the policy. The total premium paid has to be within the Rs 70,000 limit of rebate under Section 88. The lock-in period and the returns depend on the scheme and its tenure.
Unit Linked Insurance Plans (ULIPS)
Investments in ULIPs attract tax benefits under Section 80C. The returns and the lock-in period depend on the plan chosen. ULIPs basically work like a mutual fund with a life cover thrown in. They invest the premium in market-linked instruments like stocks, corporate bonds and government securities. It’s been reported that every Rs 43 out of Rs 100, goes into savings and bank deposits.
But remember, the way the tax laws currently are, the individual will have to pay tax on the entire amount that the insurance company pays after deducting surrender charges.
So to get the better capital protection and guaranteed return on investments, nothing is better to buy insurance that not only add volume to your investment, but give you returns that you can en-cash.
If you want to understand the nuances of different types of policies and its price, feel free to seek the help of InsuranceMall to select the right products based on your need that can even aid in tax savings.
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