There are different ways through which you can save tax. Some of them are:
By buying life insurance
By insuring your and yours loved one’s health:
By submitting rent receipts:
- Actual HRA received from the employer
- The actual rent paid is more than 10% of basic salary
- 50% of the basic salary if you stay in a metro city and 40% if you stay in a non-metro city
* Salary= Basic Salary+ Dearness Allowance as per employment terms
However, under Section 80GG, if you do not receive HRA from your employer or do not own a residential house, you can get a deduction of house rent expenses from your taxable income. The least of the following three will be allowed as a deduction from taxable income:- `60,000 per annum(`5000 per month)
- Rent paid minus 10% of the adjusted total income
- 25% of total income for the year
By making a charitable donation:
By financing higher education:
By buying a house:
Under Section 24, you can get a deduction from taxable house property income, of the interest paid on home loan upto `2 lakhs. Also, first time home buyers can claim an additional deduction of `50,000 on home loan interest under section 80EE, provided the following criteria are met:
- The housing loan should be sanctioned in the FY 2016-17
- The loan should not be more than `35 lakhs
- The residential house value should be less than `50 lakhs
- The home buyer should not have any other residential property registered in his name
Life insurance as a financial saving tool
Life insurance is an important part of any individual’s financial portfolio. It offers protection to you and your family against critical ailment, disability, and death. There are various types of life insurance plans like endowment plans, unit-linked plans, term insurance, etc. From a tax perspective, all these products are treated equally before the income tax law. So regardless of the type of the policy chosen, you can enjoy the following benefits:
- Under Section 80C, save tax on the premium paid on insurance policies. Under Section 10(10D), maturity/death benefits are tax-free subject to the conditions mentioned therein.
- Under Section 80D, avail tax benefit# on the premium paid towards critical illness benefit offered by term insurance plans
With the advent of technology, you can buy various tax-saving financial products online to save both your time and efforts. However, do not invest in right investment product any financial or insurance product just to save tax. It is fine to pay tax when you can’t invest in a the right investment product but never invest only to save taxes!
| Our Tax Saving Plans |
|---|
| ICICI Pru Signature - Wealth Plan Save tax up to ₹ 46,8003 under Section 80C |
| ICICI Pru iProtect Smart - Term Plan Save tax up to ₹ 54,6001 under Section 80C |
| ICICI Pru Heart/Cancer Protect – Health Plan Save tax up to ₹ 7,8002 under Section 80D^ |
| ICICI Pru1 Wealth- Wealth Plan Save tax up to ₹ 46,8003 under Section 80C |
| ICICI Pru LifeTime Classic - Wealth Plan Save tax up to ₹ 46,8003 under Section 80C |
| ICICI Pru Smart Kid - Child Plan Save tax up to ₹ 46,8003 under Section 80C |
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#Tax benefits under the policy are subject to conditions under the provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra, as per applicable rates. The tax laws are subject to amendments from time to time.
1Tax benefit of `54,600 (`46,800 u/s 80C & `7,800 u/s 80D) is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of `1,50,000 and health premium u/s 80D of `25,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above.
2Tax benefit of `7,800 is calculated at the highest tax slab rate of 31.2% (including Cess excluding surcharge) on health premium u/s 80D of `25,000. Tax benefits under the policy are subject to conditions under Section 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above.
^Tax benefits under the policy are subject to conditions under Section 80C, 80D, 80CCC, 80CCE, 80G, 80GG, 80E,10(10D), 10(10A), 10(13A) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above.
3Tax benefit of `46,800 is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of `1,50,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above.
Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
Unlike traditional products, Unit Linked insurance products are subject to market risk, which affects the Net Asset Values & the customer shall be responsible for his/her decision. The names of the company, product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
Please note that the tax write-up above is for general understanding and reference. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax benefits/savings are subject to conditions of Section 80C, 80CCC, 80CCE, 10(10A), 10(10D) and other provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra as per prevailing rates. Tax laws are subject to amendments from time to time. ICICI Prudential Life Insurance Company Limited expressly disclaims any liability to any person, if tax benefits stated above are denied to the customer.
COMP/DOC/Sep/2020/49/4402