Tax-saving or tax-planning is an important part of financial planning. If wisely done, it can serve a dual objective – help individuals meet their financial goals and save tax in the process.
Broadly, those are the 3 coverage avenues which could assist maximize tax-savings:
Life insurance is a critical part of any individual’s financial portfolio. It offers financial cover to the individual’s family in his aurance at the earliest for the family’s security. bsence. For this reason the breadwinner must aim to take life insurance.
From a tax saving angle all coverage plans are ‘equal’ earlier than the law. So irrespective of the existence coverage plan, tax-saving is assured. The premiums paid on these policies help avail tax deduction and hence they are some of the important tax saving plans that one must be sure to consider.
Pension plans or annuity plans are another form of life insurance with a different end-objective. While life insurance is geared to protect the individual’s family on his death, pension is designed to provide for the individual and his family if he lives on.
Tax benefits are applicable only in the accumulation phase.
3) Health insurance or Mediclaim
Health insurance or Mediclaim as it is more popularly known, covers expenses incurred from an accident/hospitalization. Mediclaim also covers pre and post-hospitalization expenses, subject to the sum assured.
Health insurance offers tax benefits to individuals. Insurance premium up to Rs 20,000 for senior citizens and Rs 15,000 for others is eligible for tax benefit.
