If you are just joining the workforce, tax planning is essential when it comes to reducing your tax liability. For salaried individuals, knowing how to invest money in one’s twenties and thirties can be the difference between financial prosperity and hardship in one’s retirement age. There are a slew of tax saving investments in the market currently. For salaried people, knowing where to put their money can help reduce their tax liability by the end of the financial year. Here are a few tax saving investments to consider putting your money in.
Savings Investment Plans
A traditional endowment life insurance provides you with a maturity and death benefit. The difference between pure life insurance and a savings plan is that you get a return on investment with the latter such that you can meet your financial goals in the future. Savings plans allow you to save money in a systematic long-term manner, which is essential when it comes to achieving your long-term life goals. It comes with two components investment and life insurance. With this wealth creation component, you get the benefit of putting your premiums into governmental bonds, fixed deposits, and more, such that you allow your investments to grow.
These are moderate risk plans with a decent return on investment along with protection from life insurance. These plans also serve as tax saving investments. The premium invested in savings plan is eligible for Income Tax deductions up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. The maturity benefit and death benefit are also eligible for tax benefits under Section 10(10D) of the Income Tax Act 1961. The above-mentioned tax deductions and benefits are subject to the provisions stated in the tax laws.