3 Best Tax Saving Insurance Plans in India
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, these are the three insurance avenues that can help maximize tax-savings:
Life Insurance
Life insurance is a critical part of any individual’s financial portfolio. It offers financial cover to the individual’s family in his absence. For this reason the breadwinner must aim to take life insurance at the earliest for the family’s security.
Life insurance products came in various forms with endowment plans, term plans, whole life plans, money back plans and unit-linked plans or ULIPs being the most important.
From a tax saving perspective all insurance plans are ‘equal’ before the law. So regardless of the life insurance 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.
Details
- Maximum deduction that can be claimed is Rs 1.5 lakhs
- Tax benefit under Section 80C*
- Tax-free proceeds on maturity/death under Section 10(D)*
Pension plans
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.
Two phases punctuate the pension process – accumulation and withdrawal. In the accumulation phase the individual sets aside money in his earning years. Retirement kicks in the withdrawal phase.
Tax benefits are applicable only in the accumulation phase.
Details
- Maximum deduction that can be claimed is Rs 1 lakh
- Tax benefit under Section 80CCC (sub-section under Section 80C)
- On maturity 1/3rd of the accumulated amount is tax free with the balance 2/3rd treated as income and taxed at the marginal tax rate. The amount is tax free upon death of beneficiary.
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, thus proving to be an efficient tax-saving investments. If an individual pays Rs 15,000 as premium on his own policy and Rs 20,000 for his parent, who is a senior citizen, he can claim tax benefit of Rs 35,000 (Rs 15,000+20,000)
Related Article:
- Income Tax Benefits - Section 80C and 10D
- Five mistakes you must avoid while investing to save income tax
- Deductions under 80C
- Must Known Income Tax Penalties in India-HDFC Life
- IT Department helps Pay Taxes Online and Track Income Tax Refunds
- Income tax deductions for disabled person
Term Plan Articles
Investment Articles
Savings Articles
Life Insurance Articles
Tax Articles
Retirement Articles
ULIP Articles
Subscribe to get the latest articles directly in your inbox
Health Plans Articles
Child Plans Articles
Popular Calculators
Here's all you should know about life insurance.
We help you to make informed insurance decisions for a lifetime.
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
Popular Searches
- Term Insurance Calculator
- Investment Plans
- Investment Calculator
- Investment for Beginners
- Best Short Term Investments
- Best Long Term Investments
- 5 year Investment Plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- bmi calculator
- compound interest calculator
- income tax slab
- Income Tax Return
- what is term insurance
- Ulip vs SIP
- tax planning for salaried employees
- HRA Calculator
- Annuity From NPS
- Retirement Calculator
- Pension Calculator
- nps vs ppf
- short term investment plans
- safest investment options
- one time investment plans
- types of investments
- best investment options
- best investment options in India
- Term Insurance for Housewife
- Money Back Policy
- 1 Crore Term Insurance
- life Insurance policy
- NPS Calculator
- Savings Calculator
- life Insurance
- Gratuity Calculator
- Zero Cost Term Insurance
- critical illness insurance
- itc claim
- deductions under 80C
- section 80d
- Whole Life Insurance
- benefits of term insurance
- types of life insurance
- types of term insurance
- Benefits of Life Insurance
- Endowment Policy
- Term Insurance for NRI
- Term Insurance for Women
- Term Insurance for Self Employed
- Benefits of Health Insurance
- Health Insurance for Senior Citizens
- Health Insurance for NRI
- Best Term Insurance Plan for 1 Crore
- personal accident insurance
- Annuity Calculator
- term plan