It goes without saying that proper tax planning is an essential constituent of personal finance. However, before you invest somewhere and see if you can avail tax benefits or not, it’s important that you are aware of different forms of tax saving investments. Though they come under various categories, but the ones under Sec 80C are one of the most prominent ones; thus, it’s important that you are aware of them so that you can plan and invest wisely.
To start with, life insurance policies are one of the largely chosen ways for savings. These policies for a very long time have been measured as a tax discount means. However, many times because of ignorance and lack of knowledge, the buyers buy the wrong coverage and policy and stay unsatisfied. Remember, a life insurance policy is gainful when you are on a lookout for ways to offer a monetary shield to your family in case of any mishap or unfortunate incident. What sum of insurance, you should have will depend on various factors; like your takings, expenditure, responsibilities and more. Remember that the tax benefit is the inbuilt benefit that will come with this product. So, think about this only after thoroughly knowing your needs and requirements.
Alternatively, you can also go for the Public Provident Benefit (PPF) or a Fixed Deposit (FD). The former is extremely favourable small savings scheme available to investors. The flexibility in contributions according to ones needs and requirement makes it a perfect choice for lasting funds and gaining excise benefit year on year. FD, on the other hand, for five years falls under Sec 80C tax benefit. Though generally, it is a feasible option for investors when last minute decisions have to be taken, yet the taxability of interest lowers the net yield. However, it is a good choice in current scenario especially for individuals in lower tax group.
This is not all; you can also make a tax saving investment, under Sec 80D. Under this section, one can benefit up to Rs 15000 for self and family, at the same time as added Rs 20000 is accessible for parents in senior citizen group on premium paid for a health insurance scheme. However, just like life insurance policy, remember that it should not be measured only for fiscal advantages. A health insurance is there to offer you the benefits in case of emergencies. Do a proper research and then, buy the right plan, which matches your requirement.
Always remember that keeping all the parameters in mind, and then selecting the right tax saving investment is important for getting the required benefits.