The tax-filing season in India typically begins in early January and most people continue to make last minute investments for as long as March. While the tax-paying population in India is not as large as one would expect, the income tax collection during the FY 2018-19 amounted close to ₹ 442,170 crore as per Economic Times. However, owing to the pandemic situation this year, most companies and individuals are struggling to manage their finances. To relieve the tax payers, the government announced revised dates for filing of tax returns and making various investment/ payment for claiming deduction under 80D, 80C, 80G etc for FY 2019-20, moving it to July 31, 2020, which originally fell in March 2020.
With all that is going on in the country, it is normal to be a little confused but ensure that it does not affect your tax-saving investment choices. With the right information, you can easily make your investments that pay off. The first thing you need to ensure is that you have a portfolio wide enough to cater to your taxability. So first, start with checking your tax slabs based on your taxable income –
Now that you know your tax slab and rates for FY 2019-20, the next step is to plan your investments depending on your stage of life. Depending on your lifestyle, family size, and financial needs, there are some simple investment transformations you can make to ensure that your life-goals are met. The aspects of saving taxes are super diverse, from paying home loan EMIs to your children’s school tuition fee, there are tax exemptions for different things that you can benefit from.
For single individuals with or without dependants
For the young individuals busy exploring the world, investments can very well be a road they wish not to take. However, if you think it through, this is the right time for you to consider a few investments that will keep you financially insured, be it for your future travels or the uncertainties of life. Opting for a Unit Linked Insurance Plan (ULIP) can help you fulfill all your dreams. ULIPs like the Invest 4G Plan by Canara HSBC Oriental Bank of Commerce Life Insurance are a brilliant way of saving for your great life plans, while also ensuring your family is financially safe. In addition, such savings plans can help you save up to ₹ 1.5 lakhs under Section 80C of the Income Tax Act, which allows the premiums paid towards saving instruments to offer tax-deduction. You can also consider a health insurance policy.
For married individuals and parents
If you have got married recently, or have been married for a while and plan to have kids, then it’s time you upgrade you investments to ensure these factors are accounted for. Based on your tax slab, it is advisable that you recheck your investments to cover your partners and/or dependents too. One such plan that can help you save and cover your family is the iSelect+ Term Plan by Canara HSBC Oriental Bank of Commerce Life Insurance. This term insurance plan does not only keep your back in case of an uncertainty but also offers added benefits like whole life cover, critical illness and accident cover, multiple premium options, tax benefits and much more. It also offers an option of adding your spouse in same policy. In addition, if you still feel like you are shelling out more to taxes, opt for instruments like the National Pension Scheme, which can offer additional deduction under section 80CCD.
For individuals moving towards retirement
If you are nearing to your retirement age, chances are you have bigger responsibilities and milestones to take care of, from child’s marriage to paying college fees etc. This is when you could relook on your investment portfolio and add in a trusted retirement plan, like the Canara HSBC Oriental Bank of Commerce Life Insurance’s Guaranteed Savings plan. This plan offers guaranteed benefits along with the flexibility to choose your savings horizon, along with tax benefits under section 80C. In addition, you can consider increasing your Provident Fund contribution. Your investments to an EPF scheme, home loan payments, and a life insurance policy will help you save tax up to ₹ 1.5 lakhs under Section 80C of the Income Tax Act.
The Wise Retired Ones!
The tax-benefits enjoyed post retirement as senior-citizens are unique. You can have tax-free income of up to ₹ 5,00,000, and your investment options are varied and offer larger benefits. You can opt for investment options like National Savings Certificates, Senior Citizen Savings Scheme, and ELSS. In addition, plans like the Invest 4G can help you create a generous corpus of funds, depending upon your needs and financial capabilities at the time. They allow you to control the amount of risk that your funds are subject to, while at the same time, exposing your funds to their maximum potential.
There is a financial plan to suit all kinds of needs depending on one’s life-stage and lifestyle requirements. So whether you are new to the concept of saving, still trying to figure out an ideal financial plan or planning to get retired soon, rechecking your investment and savings portfolio should be a regular practice, and constantly ask yourself – am I really saving taxes?
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