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Learn about Tax Saving investments in India with Canara HSBC OBC Life Insurance

Learn about Tax Saving investments in India with Canara HSBC OBC Life Insurance

Canara HSBC OBC Life Insurance

Investments can be complicated, especially when considered from the perspective of tax savings. Unit-Linked Insurance Plans (ULIPs) are one of the easiest and most straightforward tax saving investment vehicles. While there are other tax saving investment options

They help you accomplish both the tasks - building a corpus of funds and saving taxes at the same time. By choosing the right ULIP, you can now up your financial game by a notch, because ULIPs also come with a substantial life cover - with the right ULIP, you can expect complete peace of mind.

So what is a good ULIP? Well, ULIPs, as we highlighted earlier, are tax saving investment instruments. While the life cover component is more or less straightforward, the investment component usually comes with questions. A good ULIP should help you accomplish your specific financial goals without compromise. It should adapt to your financial situation and goals rather than the other way around. The Invest 4G Plan by Canara HSBC Oriental Bank of Commerce Life Insurance is one of the best tax saving investment options that you can buy in the market today.

The Invest 4G Plan

The Invest 4G plan comes with the best features available in ULIPs today. In terms of investments, the Invest 4G plan allows you to customise your investment through two factors: first, by letting you pick the funds that you invest in, and secondly, by letting you choose from four resilient portfolio management options.

With the Invest 4G plan, you can pick from a wide range of funds, which cater to buyers with varying degrees of risk appetite. You can choose low risk funds like the Liquid Fund or slightly riskier equity based funds.

With this flexibility, you are no longer bound by a portfolio that caters to a single degree of risk appetite. If your financial situation and goals allow you to invest with a greater degree of risk, you can now play by your rules and generate greater returns. The Invest 4G plan also comes with four different portfolio management options:

Systematic Transfer Option: With this option, you can invest in an equity-oriented fund without worrying about market volatility and the associated risk. First, your entire premium is allocated to the Liquid fund and then transferred on a monthly basis to equity-oriented funds.

Return Protector Option: With this option, you can safeguard the gains you have already made from an equity fund by transferring them to a lower-risk fund.

Auto Funds Rebalancing: On the basis of allocation proportions chosen by you, thi option allows you to maintain your allocation of investments irrespective of the market movement.

Safety Switch Option: With this option, you can safeguard your funds by transferring them to a low-risk Liquid Fund at the beginning of the later policy years.

With this degree of customisation, you can now create a comprehensive investment plan that actually helps your funds grow in the best possible way.

Apart from portfolio customisation, the Invest 4G plan comes with additional features like return of mortality charges, wealth boosters, loyalty additions, and life option with premium funding. With the last option, your family is paid the assured sum or 105% of the premiums paid, whichever is higher. At the same time, the company also funds all of your future premiums, which are paid to your family on the date of maturity.

In addition to a solid life cover, the premiums paid towards the Invest 4G Plan are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. However, the deductions under Section 80C, deductions against premiums are capped at Rs. 1.5 lacs, although there is no limit on the amount of premiums that you can pay towards the Invest 4G plan. What's more, the funds that you withdraw at the time of maturity are also exempt from tax under Section 10D.

Under the Invest 4G plan, you can also opt for partial withdrawals and settlement options. This makes it one of the best tax saving investment options which comes with a life cover and best-in-class features on both investment and insurance components. Without a solid tax saving plan, investments can only get you so far on your savings. However, with tax savings built into your investment plan, you can turn your savings into a substantial corpus of funds, helping you achieve your life goals faster. Buy the Invest 4G Plan from the Canara HSBC Oriental Bank of Commerce Life Insurance, and make a leap to a financially smart life.

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Annual Income (In Lacs)

FAQs Related to Tax Saving

First of all, your gross total income is taken into account and all applicable deductions/exemptions are deducted out of it, the resultant amount is the net income, upon which the Income Tax is calculated, on the basis of income tax slabs that are announced each year in the Union Budget.

How much tax you can save depends on your financial portfolio and profile. The most common avenue for tax-saving is Section 80C, which allows you deductions up to Rs 1.5 lakh in your taxable income. The implication is that you can save up to Rs 46,800*in taxes in a year, depending upon the income tax slab you belong to. Similarly, other avenues like interest on loans, health insurance etc also provide deductions capped at a certain amount.

*Tax saving of Rs.46,800/- is calculated at the highest tax slab of 31.2% (including 4% Cess) for an individual assessee on life insurance premium of Rs.1.5 lakh, who is having taxable income upto Rs.50 lakhs.

You can choose from many investments that are tax-exempt: not an exhaustive list, but includes Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), life insurance plans, Unit Linked Insurance Plans (ULIPs), Sukanya Samriddhi Yojana, Senior citizens Savings scheme, National Pension Scheme (NPS), tax-saving bank FDs.

First of all, make investment of Rs 1.5 lakh in investments instruments covered under Sections 80C to reduce your taxable income. Claim deductions for the interests paid on home loan and/or education loan if any. Get a health insurance policy and claim for other medical expenditure like preventive medical healthcare check-up, expenditure on rehabilitation of handicapped dependent relative, among others. Mainly, the idea should be finding out which tax saving avenues fit well with your larger financial goals and invest in them!

The maximum limit of investment that will reap the benefits of deduction from taxable income under Section 80C is Rs 1.5 lakh.

There is no limit to the number of tax-exempt investments one can have in a financial portfolio. However, it is important to note that there is a limit to how useful any instrument can be for the purpose. This is because the amount of deduction that can be claimed for specific instruments is capped at a maximum value. At the same time, keep your financial portfolio balanced so that it also provides safety, returns and liquidity.

First of all, make use of the Rs 1.5 lakh deduction allowed under Section 80C. This can be done by making investments in life insurance premium, Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), Unit Linked Insurance Plans (ULIPs), Sukanya Samriddhi Yojana, Senior citizens Savings scheme, National Pension Scheme (NPS), among others.

Second, make use of the deductions available in respect of health insurance and other medical expenses. Under Section 80D of the Income Tax Act, 1961, a deduction of up to Rs 25,000 is allowed in a year in terms of the premium paid towards a health insurance policy of Self and your family i.e., Spouse and children. This can include preventive healthcare check-ups too upto Rs 5000/-. Under section 80D you can also claim additional deduction upto Rs. 25000/- (Rs. 50000 in case of senior Citizen) for health insurance of your parents.

Apart from Section 80C, various deductions and exemptions has been provided under the provision of Income Tax Act, 1961 like deduction under section 80D can be claimed for the payment of health insurance, deduction upto Rs 50,000 on home loan interest under Section 80EE. Any donations you make to charitable institutions are also allowed as deduction under Section 80G, subject to condition prescribed therein.

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