How to Invest in Saving Schemes to Save Tax?

As the old saying goes, "A penny saved is a penny earned." Tax planning is one method for lowering your taxes while increasing your income. Saving tax, or more specifically, planning your investment, is a question that everyone seeks answers to. While tax planning is crucial, tax-saving investments are also equally significant.

As a wise investor, you should seek out tax-saving investments that provide tax exemption and allow you to earn tax-free income. There are many clever ways to save taxes and enjoy the greatest possible savings. However, for the majority of people, tax planning is something they put off until later.

A better strategy is to begin investing in the early quarters of the financial year when there is still time to plan wisely and reap the greatest returns on investment from various tax-saving investments.

How to Save Taxes with Savings Schemes?

It is a very common practice to extend tax planning decisions until the last quarter, which can turn out to be a hassled decision. As mentioned above, the beginning of the financial year is the most favourable time to plan tax-saving investments. The investments made can then multiply over time and assist you in meeting your long-term financial goals.

Moreover, as a taxpayer, you can use these guidelines to plan your tax savings for the year and make smart decisions when investing in saving schemes to save tax.

• Examine your pre-existing tax-saving expenses, such as insurance premiums, EPF contributions, children's tuition fees, home loan repayment, and so on.
• If your tax-saving expenses exceed the maximum limit of ₹1.5 lakh, there is no need to invest the full amount.
• Choose tax-saving investments such as PPF, ELSS funds, bank FDs, and NPS based on your goals and risk-taking profile.

Making investment plans that aid in saving taxes can be helpful in many aspects. Respectively, you may find Canara HSBC Life Insurance products helpful. The key features of the savings plans offered are:

1. Guaranteed Regular Income:

A guaranteed regular income plan ensures that you receive an amount that resembles your income for the number of years included in your plan. You need to pay yearly premiums, after which the benefits that you receive shall be divided into two parts.

For the first quarter, you will get the assured amount monthly, after which the income will be doubled. It has been seen that if you invest in schemes such as this, it is highly likely that you can receive up to 7.1% annual interest as a guaranteed return.

2. Limited Premium Pay:

The limited premium pay plan allows you to pay a premium for a term less than your policy term. This means that you pay premiums for a limited time, but the benefits continue for several years after that as well.

After the premium payment duration is over, you do  not have to pay any dues. For example, a person aged 40 buys a term plan for 20 years, invested in a limited pay option. He will retire at the age of 60 and therefore wants to pay off all dues in the next 10 years from today.

In this case, the person will be liable for premiums only till the age of 50 years, after which there is no need for any payment. But the policy coverage will continue for the entire 20 years.

3. Assured Loyalty Additions:

This plan provides fund value-related loyalty additions beginning at the end of the fifth policy year and continuing every fifth year until the end of the premium payment term, provided all due premiums are covered. Loyalty Additions for each Unit Linked Fund will be calculated as a percentage of the average fund value over the previous 60 monthly policy anniversaries for the respective Unit Linked Fund.

When it comes to tax savings, most people cannot take advantage because they are not aware of the schemes or the products they should invest in. Canara HSBC Life Insurance's products are one of a kind because of their reasonable pricing. Now that you are aware, it is time to invest in these products and save a lot of tax, legally.

Section 80CCC

Section 80CCC also relates to pensioners, and more specifically, to the premiums paid towards the pension or annuity plan. Under this Section, the premiums paid are exempted from taxation up to a maximum limit of ₹. 1.5 lakh, but it also includes the benefits under Section 80C. Thus, if you are paying premiums towards a pension plan, your maximum limit of tax exemption is capped at ₹ 1.5 lakh, combining both Sections.

Life insurance tax benefits are only one of the reasons why these policies are the most sought-after investment instruments. With the iSelect Smart360 Term Plan by  Canara HSBC Life Insurance, you can avail a range of other benefits, including customised plans wherein you can decide your frequency of premium payments as well as the manner in which the sum assured will be paid to your nominees.