Do Tax Saving and Investments Go Hand In Hand?
Tax regime and the guidelines for filing of returns in the incumbent set up in our country is a major economic exercise and in some cases, saving on these taxes under relevant sections is something that we all look forward to. What is of the utmost concern is for you to understand that tax-saving can be seen as a way of generating an investment platform, even if not so direct or active. Naturally, we all want to safeguard our financial interests in the form of returns or monetary gains. Both for short term and long term investments, understanding the structure of taxation on returns is very important as it enables one to choose wisely from a host of options so that substantial returns can be generated and to ensure that taxation does not eat into the hard earned savings and investment payouts.
Understanding the schemes that allow the earnings to be tax-exempt is also important and there are a host of such schemes. For instance, investing in ELSS (Equity Linked Savings Scheme) i.e. diversified equity mutual funds is one such option that allows a tax-free investment (up to Rs. 1.5 Lac in one financial year). Moreover, the lock-in period offered is 3 years. There are also the options of seeking dividends or growth in ELSS, depending on whether the purpose of investment is regular income based or long term return based. Although the returns are not 100% guaranteed and are dependent on equity performance, yet choosing the growth option over the dividend option while investing in ELSS does provide tax benefits under relevant Section 80C of the Income Tax Act, 1961. Investing in Public Provident Fund (PPF) is also a favored savings platform, given the fact that the returns are tax free and there is a guarantee of interest.
Another guaranteed way of safeguarding the returns on investment is through investment in ULIPs (Unit Linked Insurance Plans). A ULIP allows the execution of joint strategies of savings, along with financial protection and security against risks. Having the lock-in period of 5 years and the total term duration of 15-20 years, a ULIP is quite favored when it comes to assured income protection and returns after maturity. Under Section 80C, the returns on exit (after 5 years) for a ULIP are tax free.
Investment in traditional insurance plans is one more option that has remained ever popular recourse for fiscal gains and safety. However, choosing a specific plan goes a long way in targeting the financial woes and must be done in addition to purchasing a general life cover. Other than this, there are lists of schemes that offer tax benefits, e.g. SSY (Sukanya Samriddhi Yojana) under the Beti Bachao Beti Padhao campaign.
Therefore, adopting a research-based outlook to general and specific investments is equally crucial and goes a long way in ensuring that tax savings and returns on investment remain intact. For further details on insurance plans offered by HDFC Life and various key features of specific plans, kindly visit us at the mentioned link:
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