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Do Tax Saving and Investments Go Hand In Hand? - HDFC Life
Understanding the schemes that allow the earnings to be tax-exempt is also important and there are a host of such schemes. For instance, investing in ELSS (Equity Linked Savings Scheme) i.e. diversified equity mutual funds is one such option that allows a tax-free investment (up to Rs. 1.5 Lac in one financial year). Moreover, the lock-in period offered is 3 years. There are also the options of seeking dividends or growth in ELSS, depending on whether the purpose of investment is regular income based or long term return based. Although the returns are not 100% guaranteed and are dependent on equity performance, yet choosing the growth option over the dividend option while investing in ELSS does provide tax benefits under relevant Section 80C of the Income Tax Act, 1961. Investing in Public Provident Fund (PPF) is also a favored savings platform, given the fact that the returns are tax free and there is a guarantee of interest.
Another guaranteed way of safeguarding the returns on investment is through investment in ULIPs (Unit Linked Insurance Plans). A ULIP allows the execution of joint strategies of savings, along with financial protection and security against risks. Having the lock-in period of 5 years and the total term duration of 15-20 years, a ULIP is quite favored when it comes to assured income protection and returns after maturity. Under Section 80C, the returns on exit (after 5 years) for a ULIP are tax free.
Investment in traditional insurance plans is one more option that has remained ever popular recourse for fiscal gains and safety. However, choosing a specific plan goes a long way in targeting the financial woes and must be done in addition to purchasing a general life cover. Other than this, there are lists of schemes that offer tax benefits, e.g. SSY (Sukanya Samriddhi Yojana) under the “Beti Bachao Beti Padhao� campaign.
Therefore, adopting a research-based outlook to general and specific investments is equally crucial and goes a long way in ensuring that tax savings and returns on investment remain intact. For further details on insurance plans offered by HDFC Life and various key features of specific plans, kindly visit us at the mentioned link:
https://www.hdfclife.com/insurance-plans.
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Tax saving and investments - do they go hand in hand?
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance solutions - protection, pension, savings, investment, annuity and health.
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: Buyonline@hdfclife.in, Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
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