People often look to purchase an insurance product with maximum coverage and the least premium. For some others, it is one of the most efficient tax savings products. However, some insurance plans serve the dual purpose effectively. In this article, we will be discussing tax savings insurance plans and their benefits. Life and health insurance plans are a good way to cover the family in the event of an unforeseeable tragedy, and they come with a tax savings rider as an added benefit. Different types of Tax Savings Insurance PlansThere are two types of tax savings insurance plans available, these are :
Best health insurance plans in India Best Life- Insurance Plans in India What are the Different Sections to avail Tax Benefits?
Sections under which an applicant can claim tax benefits are: Ø Section 80 C Tax deductions on the premium amount on ULIP or life insurance are eligible for a tax rebate up to Rs.1.5 lakh per year. Ø Section 10(10D) No tax on money received from insurance products like an endowment. Ø Section 10(10A) You receive one-third payment as a pension plan at the retirement time. This is tax exempted. Ø Section 80D Tax deductions up to Rs.25000 on a health insurance plan is available Under the above-mentioned sections of the IT Act, a person can claim deductions for himself, dependent children and spouse. Many people buy tax savings insurance plans to reduce tax outgo, however, it is necessary to read and understand the policies and select the one that suits your need.
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