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How HDFC Life Retirement Plans Help You Save on Taxes?

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HDFC Life Retirement Plans Help You Save on Taxes
September 22, 2023

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As we make our way through our careers, a prime goal we seek to achieve is a smooth and comfortable life post-retirement. And indeed, it’s the monthly pension that keeps one tension-free in life beyond 60. This is where investment in a good pension plan can be crucial. Designed to make you save during your work life, these plans offer a chosen monthly pay-out after retirement offering a stability of regular income. HDFC Life Retirement Plans are a good example of such plans, as they take away your worries, taking care of your financial needs in your retired life. Alongside, they help you save on taxes too. 

Types of Pension Plans

Pension plans are majorly of two categories:

Immediate annuity plans: These plans require a one-time lump sum investment, based on which the subscriber gets regular payouts with immediate effect for the rest of his/her life. The frequency of payouts can be chosen as monthly, quarterly, half-yearly or annual.   

Deferred annuity plans: These plans let you pay regular premiums for a stipulated period. Post this savings phase, the policyholder can withdraw 1/3 of the accumulated corpus and use the remaining amount to buy an annuity plan. The annuity plan provides him with regular pensions throughout his life.

These plans can be further divided into two types: 

Traditional retirement plans: These low-risk pension plans let you invest in debt instruments like government securities that protect your capital, and are suited to the needs of people with low-risk appetite.HDFC Life Click 2 Retire plans can be classic choices here.

Unit-linked pension plans: For those who seek to earn high returns and plan to retire early, these plans can be ideal. Here, you can put your money into a mixed portfolio of equities, bonds, mutual funds etc, that generates high returns over a long investment horizon. HDFC Life Click 2 Invest ULIP plans fall in this segment.

Tax benefits of HDFC Life retirement plans

While retirement plans ensure the stability of regular income in your retired life, there’s something else to look forward to. These pension plans also provide you with tax benefits under Section 80CCC & 10(10A) under the Income Tax Act, 19611. Accordingly, you can deduct the amount of any investment made towards these plans from your gross income, saving taxes in the process. Naturally, the earlier you start, the greater the chance of getting bigger tax deductions and higher returns.

Tax deduction u/s 80CCC1: Premiums paid in a financial year towards pension/annuity plan for receiving pension from a fund are eligible for deduction under Section 80CCC1 up to the limit of Rs. 1,50,000/- in a financial year.

Tax exemption u/s 10(10A): Any payment received in commutation of pension as a lump sum on maturity is exempt under section 10(10A) of the Income-tax Act, 1961, subject to fulfilment of various conditions under the current income-tax law.

Any pay-outs under an annuity plan are taxable. Taxes are taken care of, a regular flow of income is ensured, and you get to enjoy your retired life in all comfort and leisure. For that, just pick the best pension plan available and start saving for a worry-free future!

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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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.

Disclaimer

  1. Tax benefits are subject to conditions under Sections , 80CCC, , Section  10(10A) and other provisions of the Income Tax Act, 1961.
  2. Tax Laws are subject to change from time to time. The customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

HDFC Life Click 2 Retire (UIN No: 101L108V04) is a Unit Linked Pension Product. This version of the product brochure invalidates all previous printed versions for this particular plan.

HDFC Life Click 2 Invest - ULIP (UIN : 101L100V04) is a unit linked non participating life insurance plan. Life Insurance Coverage is available in this product.   

For more details on risk factors, associated terms and conditions and exclusions please read the sales brochure carefully before concluding a sale.  

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

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