How to Save Tax Efficiently?

At the end of every financial year, people pay taxes to the government. A tax is a financial charge levied on a product, income, or activity. Tax paid by the citizen is used by the government for infrastructure development. The government also provides provisions for savings, using which; one can reduce their tax liability. For this, proper tax planning is needed. One can make various investments in various avenues and obtain tax benefits.

The Section 80C of this act is one such section that provides with various tools to obtain tax rebate. The Indian government lists various deductions that are eligible for tax exemption. The Income Tax Act has various sections that deal with tax deductions that a person is eligible to pay. These deductions include various saving and investment options which an individual can make to avail tax benefits.

These various schemes are referred to as Tax Saving Schemes. The various tools that are available for tax deductions approved are listed below:

Life Insurance: Life insurance is the best tool that is used for saving tax. In this, a premium amount is to be paid to the insurer after a specified interval. The amount is paid as premium is eligible for tax deduction.

Public Provident Fund: It is the most effective and popular method of tax planning. It provides high returns in terms of interest rates. The minimum amount that can be placed in a PF account is Rs. 500 and maximum amount is Rs 1, 00,000 and the interest rate is 8% per annum.

Mutual Funds: Professional managers often invest in pools of assets referred to as mutual funds. These are either in general investments or in a particular sector. Some of these may pay dividends but, may assign all or a part of these as Capital Gains dividends so as to reflect them as capital gains earned by the mutual funds.

Tuition Fees: The tuition fees paid by an individual towards full time education including pre-nursery, play-school activities and nursery classes, paid to an university, school or college of any two children of an individual.

Not only this, there is the Senior Citizen Scheme, National Saving Certificate Scheme, Deposits made in Post Offices for a period of 5 years or more, investing in infrastructure bonds and so on. All these above given procedures and many more help you to save tax efficiently. One can obtain more information online and avail the best one which suits them or compare them to make an informed choice.

Life Insurance: Secure your family future in advance

Today’s uncertain economic condition, getting insurance is a smart and intelligent move for the persons who want their family financially secure even after their death. Life is filled with chance happening, and no one knows what tomorrow hold for them. Accidents, disease, death are waiting round the corner, and no one on earth can get away from them. Life insurance gives you the chance to minimize the risks and to add protection to your life. Life insurance is one of the most advantageous, established and approved among all insurance policies. This policy offers you far too many benefits.

Planning your budget smartly is a genius game but planning your tax efficiently is a skilled job. Tax Saving Schemes is the excellent way to save your income and savings. The tax rates are different for each income support. An individual has to pay tax depends upon his yearly income, but there are many methods to save your tax. As the date of filling tax return arrives, you are going to your CA's and financial centers to have appropriate policies and investments for the maximum amount of tax can be saved. There are so many financial advisors who can give you the proper advice about tax saving plans. To get maximum tax benefits, customer has to invest his income carefully in the different schemes.

Everyone wants to spend most of his income upon itself, rather than paying as a tax. Tax saving benefits is applicable for the premium paid on life insurance policies Under Section 80C of Income Tax Act. This is the list of the top 5 options to save your income tax:

1.  To save your tax last minute, investing in life insurance is the best way. Select the investment plan under section 80C, before you make an investment. It offers you the best tax saving option.

2.   If you need enormous profit on your investments, small saving schemes are not so productive, but it is one of the smart ways to save tax. Small saving schemes are public provident funds (PPF) and national saving certificate (NSC).

3.  Equity is another option. These schemes are like mutual funds. These saving schemes are making     a profit and acquire tax benefits.

4. Getting a home loan is the best option. You can share your EMI payments if you are an employed couple. Then you get tax benefits.

5.   Health Insurance is one of the most appropriate and fastest ways to save tax. You can analyze various policies such as Hospital Guard, Health Cash, Instep Insure, Health Advantage Plus, Star Package and others.

Factors to Know Before Applying For Life Insurance

Life Insurance is the financial protection provided to the family of the people in the case of their death. For the secured and bright future of the person’s family, he or she wants to get the best insurance policy. Most of the customers looking to buy a life insurance policy, and want a policy that provides enough coverage without overpaying. Life Insurance provides the best plan. The historical record of the people tells the premiums of the life insurance policy that actuaries determine by calculating complex algorithms.

The premiums of insurance policy also depend upon the medical history, age, health records, credit scores, hobbies, driving record and the current health of the applicants. SBI Life Insurance is an insurance company that offers the several different life insurance policies according to the necessity of the persons. Consumers should have to know about some factors before applying for insurance. People should have to understand the different insurance policies and insurance types.

Take benefits of online life insurance quotes

The licensed insurance professionals that work with reliable and trustworthy aggregator websites will provide unbiased guidance to the persons, and are likely to recommend products best suited to the person’s needs. Persons can go from agent to the agent to get quotes for several life insurance products, but Online Insurance  offers the opportunity to explore the best and the right policies applicable to the person’s situation easily, quickly and conveniently.

Factors to consider before making a final decision

Consumers should have to consider the financial strength of the life insurance company. Many online insurance websites provide the financial rating of the company along with a life quote. The company with the highest rating provides the best rates of SBI life insurance policy.

Ask queries and other questions related to the Life Insurance Policy

Various online websites provide a service to answer any of the person’s life queries. The person should have to ask that is the term plan is convertible to Whole Life Insurance at a later time. The person should have to ask for the joint policy. This policy insures both husband and wife and the surviving spouse will receive the benefits. The joint insurance policy is cheaper than buying the individual life insurance policy.

Secure Your Beloved Ones by Insurance Plan

Life is unpredictable in nature no one can avoid all the hidden surprises given by life. One cannot avoid unwanted deaths and accidents. After these unexpected events, the dependents of the dead person have to suffer from the financial point of view. The person who is single earner can secure the future of their loved ones by going for life insurance plan. Life insurance is the mutual contract between insured (policy holder) and insurer (policy provider) to pay the decided beneficiary sum upon the death of the insured person. On the death of the person, nominee will receive the designated sum and can use this money for future.

There are various companies currently providing insurance policies. Some companies like LIC, AVIVA, Bajaj Allianz, ING Vysya. LIC of India is one of the leading public sector insurance companies in India. It is the only public insurance company rest are the private players. There are various types of policies available in life insurance. These are term insurance policy, child life insurance policy, whole life insurance policy and so on. In term insurance policy,  the nominee gets the designated sum upon the death of an insured person. Child life insurance policy is used to secure the future of own children. This money can be used for the child’s education, wedding etc in case of absence of money sources.

Every person tries to pay a small amount of tax as possible. The insurance policy can be used to avail tax benefits. Various other policies have been issued by government through which a person can save tax easily. Income Tax Slab is one of the investment policies. By using it, one can utilize his / her investments properly.

The biggest benefit of availing Life Insurance is peace of mind. The person after availing this policy will be assured that there will not any financial hardships in case of sudden death. Some time the family needs to sell the home assets in the absence of income source. The person can save the valuable assets so that they are not sold off by availing insurance plan. The insurance plan can be used for good financial planning according to person requirement. Though the amount to be paid is much higher, but the gains are also higher. Life insurance plan is also a good source for availing tax benefits. By availing this plan, the premium of policy is exempted from the amount of tax.

Life Insurance - Preparing for the Inevitable

A life insurance can be described as an official contract, between two individuals, i.e. the insured and an insurer, wherein the insurer promises to pay a specified beneficiary, an amount of money upon the death of the insured. The policy holder pays either regularly or a lump sum as premium to the insurer. There are three categories of life insurance, whole insurance, term insurance and universal insurance. The whole insurance includes the entire life and beyond of the insured. It also includes insurance and an investment fund. Term insurance lasts for a particular period and has no investment component. Universal insurance is a combination of term insurance with money market investments.

The life insurance policies also provide investment options along with tax benefits to the insured Under Section 80C as per the Tax Act. Products that are best suited to the need of the individual such as child plans, retirement plans, pension plans, etc are also provided. The section 80C under the Tax Act provides certain Tax Saving Schemes which help individuals obtain a tax deduction on their annual income. When a person invests up to a maximum amount of Rs 1 lakh, some of these investments are deductible from the income. Various financial service providers are providing insurance covers in India such as the SBI Life Insurance which is currently the best life insurance in the country.

Some of these tax saving schemes have been listed as below:

1. Post Office Time Deposits: These are fixed deposits in the small savings segment. The POTDs of 5 Year is only eligible for tax benefits though under this section.

2. National Savings Certificate: Requires a lump sum investment for a 6 year period presently with a return of 8.0% p.a.

3. Public Provident Fund: Every year deposits need to be made to keep the account active and extend over a 15 year period.

4. Life Insurance Premiums: A premium or a lump sum has to be paid by the insured to the insurer.

5. Equity Linked Savings Scheme: Some mutual fund schemes known as Equity Linked Savings Scheme are eligible for Deduction Under Section 80C.

Some other avenues such as Voluntary Provident Fund, Infrastructure Bonds, Pension Funds, Bank Fixed Deposits, children's education expense are declared as deductions under Sec 80C.

Life insurance is for providing a security cover to the life of an individual. It includes whole insurance, term insurance, and universal insurance. Benefits of life insurance are not only limited to insurance but also provide investment plans and tax benefits under section 80C.

ONLINE INSURANCE - AN EFFORTLESS WAY

Online Insurance is applying for insurance on the internet. It has many benefits in our life. First of all it saves time and effort.  People used to visit every bank when they were required to take insurance. Therefore, it resulted in the wastage of both time and money. But now companies have their own websites through which anyone can apply for life insurance.

Secondly there is no need of any paper or document for Online Insurance. So it is simple and easy to use. The process of negotiation is also very fast as compared to the traditional method. Moreover, individual do not get confused for any documents or process. Another benefit of Online Insurance Quotes is that it is more secure than offline insurance quotes. Since it provides the feature of online payments, which not only saves time but also provide security. Many banks have special customer care for life insurance; they provide all the required information.

One more advantage of this Insurance is that the sites provide many benefits at a cheaper rate as compared to genuine banks. They also provide the comparison with various other banks on interest rate and policies. The information is adequate and instant. Even some sites provide you the facility to change some plans according to the requirement which one do not gets normally. Therefore, you can give changes to your own policies. So, this criterion has many additional benefits such as special promotions and Tax Saving Schemes.

The form provided by these sites is easy and simple to fill and if anyone has a problem he/she can go for customer care and they give the instant information. One should fill only the relevant details. The sites also give you the updated information in the form of mails and SMS alerts.

As mentioned, online insurance provides you an easy way to save and secure the future. But you need to be watchful while going through these sites and then apply. All companies have their Insurance Broker for giving the required knowledge. The details filled by you must be correct and relevant and should match with your data. Be smart and utilize your time by applying for online insurance.

Ways to Save Tax under Section 80C

As the income of an individual increases the Income Tax paid by him also increases. But the government provides various schemes through which person can not only save tax but also he can invest his income in a useful way.  The Indian government has provided options such as ELSS (Equity linked saving schemes), health insurance and infrastructure bonds. The ELSS is aimed at providing rebate to the tax payers. There are many banks that offer health insurance and individual can invest his or her money. Besides this financial organization such as LIC, SBI and L&T cover infrastructure bonds and one can get the best benefits. All the schemes come under Section-80C.

Now what is Deduction under Section 80C? It is a law which has been introduced by the government. It comes under the Income tax department and allows certain investments and expenditure to be tax-exempted. One needs to plan properly before investing in any of the schemes. First of all the Section 80C offers savings plan such as NSC (National Savings Certificate) and PPF (Public Provident Fund). The NSC is a post office saving scheme, here one is exempted from tax by investing an amount up to 100000 per year. The rate of interest is compounded half yearly at the rate of 8%%, and there's a reinvestment every year from the last year's NCS. Government has provided tax saving plans under Section 80C which is a law under Income Tax department. The scheme provides ways a person can utilize his or her income efficiently.

Public Provident Fund investment plan is appropriate for reducing the taxes under the limit of 1 lakh. The return in this Tax Saving Schemes is compounded annually at the rate of 8.5%. Another popular tax saving under this section is FD (fixed deposits) which is a fixed amount invested for a particular duration but here the minimum duration is 5 years. A life insurance premium for an individual or his child is also included in Section-80C. But borrower should know that the premium for parents and grandparents doesn’t come under this. The latest and a lucrative scheme is Senior Citizens Savings Scheme (SCSS) 2004 where the current rate of interest is 9% per annum payable quarterly.

The Tuition fee called the amount paid towards the education of children is also included in this, but one can get a maximum exemption of 100000. Lastly there are various Health premiums provided by banks. The Section 80c has been provided only for the benefit of people. So everyone must go through the information properly about the relevant schemes before applying and can choose the best.