LIC Tax Saving plans and benefits helps the proposer to build corpus for future. Income Tax limit under section 80C is limited to Rs. 1,50,000/-. With recent salary structure employees easily cross this limit with Provident Fund ( PF ) itself. Many of my clients say that the limit is over for investment. No need for Investment and Insurance.
Never limit your life insurance with 80C and other tax saving schemes. You need to insure and invest the maximum to safeguard your families and dependents welfare. You are priceless. Insure yourself to the maximum by consulting knowledgeable financial planner after going through feedback/ testimonials from existing clients.
What is the best tax saving plan ?
Broadly there are two types of plans. Money Back and Endowment plans. These are the main plans in all Insurance companies. As these plans are basic in nature, returns are comparable to Bank deposits. Almost all LIC plans save tax and also give tax free returns. The best tax saving plans would be flexible from all sides. Saving tax today and paying tax at maturity may not be a good idea. Major LIC plans comes with dual tax benefits. Some popular plans for Tax Saving are LIC Jeevan Anand, Jeevan Labh and LIC Jeevan Umang.
How much should I invest in 80 C?
Everyone asks this first before any investment. Everyone needs 25 to 30 times his annual income as insurance cover to take care of his family, children and parents. Section 80C is just a limit of payment from your taxable salary for Insurance, investment plans. There is no limit to invest in Insurance and Pension plans. Whatever may be your investment, returns are going to be 100% Tax free under section 10 (10D ) of Income Tax Act 1961.
Investments under 80C
- Life Insurance
- Bank Deposits above 5 years
- Tax Saving Mutual Funds ELSS
- Post office deposits
- Provident Fund
These are some of products under 80C. Nowadays, most of the employees cross 80C limit very easily with Provident Fund itself.
How can I reduce my income tax ?
Taxable income may be reduced to a great extent by proper planning. let us see how Income Tax section 80 C works.
In the recent annual Budget section 80 C deduction were untouched and remains same as year 2018-19. An amount of first Rs. 2,50,000/- is non taxable for all tax paying citizens in India. Tax @ 5% for Rs. 2,50,000 to 5,00,000/- , 20% for Next Rs. 5,00,000/- to Rs. 10,00,000 and 30% more than Rs. 10,00,000 as per Income Tax slab.
It is easy to calculate tax payable by analyzing the salary slips. Normally Tax deduction starts every year from November onwards. If the commitment given to HR on Investments not fulfilled, there are chances to loose maximum salary on Tax deductions.
Online Income Tax calculator is available at https://www.incometaxindia.gov.in/Pages/tools/income-tax-calculator.aspx for all to calculate and start saving.