4 Tax Saving Options for Salaried Employees

4 Tax Saving Options for Salaried Employees

We all work hard to earn and provide for our loved ones to ensure that we can have a smooth and hassle-free life. Moreover, we also want that our loved ones achieve all they have planned. However, we know that life is full of uncertainties. We do not know when an untimely or unforeseen event might knock on our doors. To ensure that our loved ones face no inconvenience in future, we often invest in insurance policies. Insurance policies provide us with financial security and ensure that we are at peace of mind and live a seamless life. There are various benefits of investing in an insurance policy, such as tax benefits, death benefits, financial security and more.

While paying taxes, we often face inconvenience and hassle. It is essential to know about tax saving options for salaried employees as a taxpayer. Knowing about tax savings ensures that you do not face any hassle in future.

While going for ideal tax saving options through purchase of life insurance for salaried employees, it is also essential to go for an insurance provider that is leading and most trusted.

Let us now get to know everything about the best tax saving options for salaried employees to invest in.

1. Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan (ULIP) is one of the best tax saving options for salaried employees to invest in. ULIP is an insurance plan that provides dual benefits of insurance and investment. Apart from financially securing yourself and your loved ones, ULIP lets you invest your money in the market in the form of shares, bonds, equity, stocks, etc.

Let us look at some of the benefits of the Unit Linked Insurance Plan (ULIP)

Benefits of Unit Linked Insurance Plan (ULIP)

Life Coverage

ULIP provides life coverage, under which the nominee gets the sum assured upon demise of the policyholder.

Tax Benefits

One of the key benefits of investing in a ULIP is the tax benefits* that the policyholder gets. The premiums paid by the policyholder are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.

Flexibility

Another reason why ULIP is one of the best tax saving options for salaried employees is that the policyholder has the flexibility to choose how he or she wants to invest. ULIP comes with a wide range of market-related options to invest your money. It can be shares, equity, bonds, etc. You can invest your money in these market-related options, depending on your risk-taking capacity, you can get lucrative returns.

Add-on Rider Benefits

Unit Linked Insurance Plan gives you the benefit to opt for add-on rider benefits to get added benefits on your existing policy. You can opt for rider benefits such as accidental death rider benefits, waiver of premium rider benefits, disability caused by accident rider benefits, etc. Please note that riders are not mandatory and are available at an additional cost.

2. Public Provident Fund (PPF)

Another one of the best tax saving options for salaried employees to invest in is Public Provident Fund (PPF). PPF provides the policyholder with ideal interest rates with good returns. The minimum tenure of PPF is 15 years, on which the policyholder can get it extended by 5 years if he wants.

Let us look at some of the benefits of investing in a Public Provident Fund (PPF).

Benefits of Investing in Public Provident Fund (PPF)

Tax Benefits

One of the key benefits of investing in a PPF is the tax benefits* that the policyholder can claim. The premiums paid by the policyholder for PPF are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.

Facility to Partially Withdraw

We know that the minimum tenure of PPF is of 15 years. In case of a financial emergency, the policyholder can partially withdraw after the 5th year of the policy.

Provision of Loan

A situation may arise wherein the policyholder might require taking a loan. In such cases, he or she can take a loan against the policy.

3. Life Insurance Policies

Another one of the best tax saving options for salaried employees to invest in is a life insurance policy. A life insurance provides your family with a lump sum amount of death benefits in case of the policyholder's untimely and unforeseen death.

Let us look at a few benefits of investing in a life insurance policy.

Benefits of Life Insurance Policy

Tax Benefits

One of the key benefits of investing in a life insurance policy is the tax benefits. The policyholder can claim tax benefits* on the premiums he pays under Section 80C of the Income Tax Act.

Financial Security

A life insurance policy provides you and your loved ones with financial security in an unforeseen and untimely mishap, such as the policyholder's death. This will ensure that your loved ones do not face any inconvenience in your absence and live their lives seamlessly.

Invest While You Are Young

The premiums paid by the policyholder are much more affordable while he is young than when he is older and at a later age. Therefore, it is always recommended to invest in a life insurance policy while you are young.

4. Health Insurance Policy

A health insurance policy is one of the most preferred tax saving options for salaried employees. A health insurance policy takes care of your medical expenses in case of hospitalisation or a medical emergency. It ensures that you do not have to face any financial inconvenience and focus on your recovery.

Let us look at some of the benefits of investing in a health insurance policy.

Benefits of Investing in a Health Insurance Policy

Tax Benefits

The premiums paid by the policyholder for the health insurance policy are eligible for tax benefits* under 80D of the Income Tax Act, 1961.

Financial Security

We all know that medical expenses are rising day by day. Therefore, to ensure that you do not face any financial drawback in a medical emergency, it is recommended to invest in a health insurance policy.

Peace of Mind

No one wants to constantly worry about how he will manage the financial requirement if he or she gets hospitalised, right? Investing in a health insurance policy gives you peace of mind and free you from any worry.

Wrapping Up

The above mentioned are a few of the best tax saving options for salaried employees to invest in. Before investing in tax saving policy, it is essential to compare and choose the well-suited policy for you and your family.

Disclaimer:

*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Guaranteed Wealth Pro

  • A non-linked, non-participating individual savings life insurance plan
  • Flexibility to choose the payout structure
  • Multiple income options
  • Option to receive tax free income beginning from the second policy year itself
  • Option to get lifelong income along with life cover till 100 years of age

Bharti AXA Life Shining Stars

  • Non-linked, non-participating limited pay endowment Life Insurance plan
  • Designed to take care of the financial needs of your child.
  • Flexibility to opt between 2 Maturity Payout Options
  • Flexibility in Policy Term/Premium Payment Terms
  • A great short-term investment option for a child insurance policy.

Bharti AXA Life Super Series

  • A non-linked non-participating individual life insurance savings plan
  • Range of investment duration and returns
  • Guaranteed money back benefits (provided policy is in force and all due premiums have been paid)
  • Income tax benefits (as prevailing tax laws in India that are subject to changes)