Posted on Feb, 2019 by PINC Insurance
With the end of the financial year almost here, most people have only just started running around to save on taxes. There are several tax saving instruments available in the market such as ELSS Mutual Funds, Fixed Deposits, Post Office Savings, PFF, NPS, and EPF. There are several ways you can save taxes with an insurance policy too. These are mainly under Section 80C & Section 80D of the Income Tax Act. Taxes can be saved through insurance by investing in a life insurance policy, by investing in a health insurance policy, or as work expenses in the case of professionals. While you make a choice before 31st March, here is a little information that can help you make sound financial decisions.
Life Insurance & Section 80C
Life insurance is an important means of protecting your loved ones from uncertainty in your absence. But it can secure more than their well-being. Life insurance allows tax exemptions under section 80C and 10(10D) of Income Tax Act. There is no upper limit on the amount you could save under this option. A life insurance is a long term investment that most people skip out on because they don’t think it’s important. However if started early, the lower premium rates can help you pay less, and get a higher coverage for when the inevitable happens. This also extends to ULIPs and Home Loan Insurance plans.
Health Insurance & Section 80D
Health insurance is especially important because of the rising costs of healthcare and the sudden incident that can strike anyone. But’s more than a safety net for when things go wrong, it’s a tax saver too. Health insurance is eligible for tax deductions under section 80D of Income Tax Act. Starting a good health insurance early can help you pay lower premiums while getting higher benefits. It also helps if you cover more members of your family early on. It’s important to also look at what treatments are covered by a health insurance while taking it. Health insurance can include critical illness covers too.
Self Employed Professionals & Business Expenses
A little known means of deducting things such as auto insurance is that of business expense deductions. For self-employed professionals who use their vehicle for work purposes, they can deduct the premiums paid for the vehicle insurance as business expenses. Vehicle insurance is mandatory for all vehicles in India. Now that you know how insurance can help secure your life as well as your taxes, what choices will you make before 31 st March?