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How to save tax in India 2018-19?

Tax saving season is already here for salaried and non-salaried taxpayers who start going through the tax saving investment options for the financial year 2018-19 before 31 March, 2019. Most people would be looking for investment options that not only help you save tax but also generate tax-free income. You can save your hard earned cash from getting drained by making use of these tax saving tools.

Savings Plans-Life Insurance Plans Traditional savings cum life insurance plans - a saving cum protection oriented traditional life insurance plans fall in this category. Saving plans not only assist you financially by guaranteeing returns in the form of regular payouts but also comes with tax savings on all premiums paid and payouts. These saving plans are one of the safest ways to let your money grow. It gives you a guarante

ed regular stream of income and guaranteed benefits (if all the due premiums are paid) and immediate guaranteed payout in case of loss of life.

Term insurance plans

These are the purest form of life insurance is the best way to secure the life goals of your loved ones. The section 80C of the Indian Income Tax Act,1961 allows exemption for life insurance premiums up to Rs. 1.5 Lakh per annum and so a term plan is eligible for tax deduction.

Health insurance

It is a smart plan every person should have in his/her portfolio as a health insurance policy serves as an efficient tax saving scheme. In additional with the medical benefits of health insurance, a health insurance policy reduces a taxpayer’s annual income tax liability to the premium paid. Also, it also makes you eligible for income tax exemption under 80D for a premium paid for not only the insurer but also his/her family and parents. The upper limit for the deductible paid from the taxable income is Rs. 25,000 and is extensible to 30,000 for senior citizens.

Equity-linked savings schemes

ELSS come with guaranteed features - first, investment amount qualifies for tax benefit up to a limit of Rs. 1.5 Lakh a year and second the amount invested has a lock-in period of 3 years. The lock-in period of a mutual fund is lower if compared to fixed deposit and PPF. However, it offers huge return on investment.

Unit-linked insurance plan

ULIPs are a good combination of investment and protection under a single plan. Financial investments done under ULIPs are eligible for tax deduction. It not only lets your money grow but also comes with multiple attractive features like - multiple fund options with varying asset allocation between equity and debt, policy terms, waiver of premium, etc.

Public provident fund

PPF scheme has one of the trustworthy saving avenues for Indian investors that still holds credibility. Though PPF offers 8.0% (currently) interest rate, it offers a huge taxable return. A PPF account can be activated with a minimum amount Rs. 500 and the maximum amount that can be deposited in a financial year is 1.5 lakh. PPF is a long scheme with a lock-in period of 15 years with triplefold benefits to investors.


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