Is it possible to save taxes with life insurance? Read here
Income tax can be a significant expense for many individuals and businesses, and finding ways to reduce your tax burden can be an important part of financial planning. One potential option for tax savings is life insurance.
Income tax saving schemes can offer tax benefits under certain circumstances, making them a potentially useful tool for those looking to save on their income taxes. In this blog, we’ll be exploring the tax benefits of life insurance policies and how they can be used as part of an overall tax-saving strategy.
So if you’re interested in learning more about using income tax saving schemes for tax savings, keep reading!
What is Income Tax Saving?
Income tax is a tax levied on individuals and businesses based on their income or profits. In most countries, income tax is progressive, meaning that higher earners pay a higher tax rate.
Income tax saving refers to strategies or techniques used to reduce the amount of income tax an individual or business is required to pay. There are various methods of income tax saving, including tax deductions, exemptions, and credits. These strategies can be used to lower an individual or business’s taxable income, resulting in a lower tax liability.
Income tax saving is an important part of financial planning, as it can help to increase cash flow and improve financial stability. By minimizing the amount of income tax paid, individuals and businesses can keep more of their hard-earned money and use it to achieve their financial goals.
Which is the best income tax saving plan in India?
The iSelect Guaranteed Future Plan by Canara HSBC Life Insurance is one of the most popular income tax saving schemes in India that offers a range of benefits for policyholders. This plan is designed to provide financial protection for you and your loved ones, while also offering the opportunity to save and grow your wealth over time.
One key feature of the iSelect Guaranteed Future Plan is the tax benefits it offers. Under Indian tax laws, premiums paid on a life insurance policy are eligible for tax deductions, up to a certain limit. This means that policyholders can reduce their taxable income by the number of premiums paid on their policy, potentially resulting in significant tax savings.
In addition to the tax benefits, the iSelect Guaranteed Future Plan also offers guaranteed benefits at regular intervals during the policy term, as well as a guaranteed maturity benefit at the end of the policy term. These payments can be used to meet financial needs or achieve financial goals.
The iSelect Guaranteed Future Plan offers a wide range of features and is designed to support both short-term and long-term financial goals. One of the key features of the plan is the Guaranteed Maturity Benefit, which is intended to assist customers in achieving their financial objectives. Additionally, the plan includes incentives, such as it allows for Guaranteed additions to accumulate over the past five policy years, to further enhance the policy’s benefits for policyholders.
Tax benefits in iSelect Guaranteed Future Plan
Here are some of the tax benefits offered by the iSelect Guaranteed Future Plan by Canara HSBC Life Insurance in India:
1. Tax deductions on premiums
Premiums paid on a life insurance policy are eligible for tax deductions under Indian tax laws, up to a certain limit. This means that policyholders can reduce their taxable income by the number of premiums paid on their policy.
2. Flexible premium payment options
The iSelect Guaranteed Future Plan allows policyholders to choose their premium payment frequency and amount, giving them the flexibility to customize their policy to suit their specific financial needs and goals.
3. Payor Premium Protection Cover Tax Exemption
If the optional Payor Premium Protection Cover has been chosen, all future premiums payable shall be waived off and the policy shall continue as in-force till the end of the Policy Term with all the future benefits intact. This is exempted from taxation under Section 10(10D) of the Income Tax Act, 1961.
4. Guaranteed maturity benefit
At the end of the policy term, policyholders receive a guaranteed maturity benefit, which is equal to the sum assured plus any bonuses accrued during the policy term.
5. Block facility and premium waivers
The iSelect Guaranteed Future Plan also includes a block facility and premium waivers, which can provide additional financial security and convenience for policyholders.
Overall, the iSelect Guaranteed Future Plan by Canara HSBC Life Insurance offers a range of tax benefits and financial benefits for policyholders in India, making it a comprehensive income tax saving plan.
What are the safety aspects of investing in the iSelect Guaranteed Future Plan?
The iSelect Guaranteed Future Plan by Canara HSBC Life Insurance provides a range of safety aspects to its customers while investing. This plan is ideal for individuals looking for long-term savings and financial security.
- It offers guaranteed benefits such as maturity benefit, death benefit and a guaranteed yearly addition.
- It also offers an optional Payor Premium Protection Cover which provides sum assured on death.
- With this plan, the customer can choose their plan option, premium amount, premium payment term, and premium frequency as per their financial needs.
- The plan also offers tax benefits as per prevailing tax laws. Moreover, its customer service is available round the clock for any queries or issues. Customers can contact customer service through toll-free number, emails and locate branches. The customer support team is always available to help customers in making informed decisions regarding their investments.
- Furthermore, the plan is a joint venture between Canara Bank (51%), HSBC Insurance (Asia Pacific) Holdings Limited (26%) and Punjab National Bank (23%). This ensures that the customer’s funds are safe and secure with a trusted institution.
In a nutshell, the iSelect Guaranteed Future Plan by Canara HSBC Life Insurance is a great option for individuals looking to plan for their future and secure it against uncertainties. It offers a wide range of safety features and benefits, making it a reliable and secure investment option.
Wrapping It Up
Life insurance can be a useful tool for those looking to save on their income taxes. By choosing the best income tax saving schemes that offer tax benefits, policyholders can potentially reduce their taxable income and save on their income taxes.
One income tax saving plan that stands out due to its comprehensive benefits is the iSelect Guaranteed Future Plan by Canara HSBC Life Insurance. In addition to offering tax benefits on premiums paid, this plan also includes guaranteed survival benefits, a guaranteed maturity benefit, flexible premium payment options.
When considering an income tax saving plan, it’s important to consider the financial stability of the insurer, the terms and conditions of the policy, diversification, and professional advice. By taking these factors into account, you can choose income tax saving schemes that meet your needs and help you achieve your financial goals.