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Why is January an important month for tax saving?

The calendar year starts on 1st January and ends on 31st December1. The financial year, on the other hand, starts from 1st April and ends on 31st March of the following year 2. For accounting and tax filing purposes, the financial year is often considered. Individuals and business entities plan their finances and taxes for each financial year. After every financial year, you have to calculate your income and pay taxes on the same. There is a tax filing deadline too, within which you have to file your taxes. Usually, the tax filing deadline for individuals who do not fall under tax audit3 is 31st July every year. This means that after the financial year ends in March, you have four months to file your returns. However, when filing your returns, you have to plan your taxes before 31st March because tax planning should be done within the financial year to claim the tax benefits in the income tax returns.Read More

However, the general tax filing date for audited cases is usually the 30th of October, which was revised to 15th November in 20243. There are several deadlines for various types of filing and it needs to be checked to avoid penalty. When it comes to tax planning, there are various investment avenues that can help you save tax. You can invest in these avenues any time of the year as long as it is within 31st March. However, doing it as the new year starts is feasible. Let’s understand the advantages of investing at the beginning of the year.Read Less

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Written ByShruti gujarathi
AboutShruti gujarathi
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Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 23rd Jan 2025
Modified on: 25th Jan 2025
Reading Time: 15 Mins
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Advantages of starting investments in January
 

Here are some benefits of early year investments –
 

1. The motivation to start fresh
 

The new year brings with it the motivation to make good resolutions that can last all through the year. In January, you might be motivated to start good financial habits and saving and planning taxes can be one of them.
 

2. Time to plan
 

As January starts, you have three months to plan your taxes and invest in tax-saving avenues. This gives you time to compare, assess and then choose suitable investment options that not only save tax but also help you create a corpus for your financial goals.

Moreover, when you have time, you can consult tax experts to learn about the different tax-saving options available for you to lower your taxes.
 

3. No risk of rushed decisions
 

Last-minute tax planning can lead to rushed decisions which might be erroneous. In January, as you have time, you don’t have to rush. You can carefully assess and analyse the investment options and make an informed decision to eliminate the possibility of mistakes.
 

Tips for saving tax
 

While January is a good time to start planning your taxes, here are some options that you can consider to save tax –
 

1. Buy life insurance
 

Life insurance plans act as a financial safety net that helps you create a financial corpus for life’s unexpected eventualities. It can provide your family financial assistance in your absence so that they can meet their financial needs with ease. Life insurance plans can, thus, be an important risk mitigation tool in your portfolio.

Besides helping you plan against unforeseen events, life insurance plans also help with tax savings. The premium paid for the life insurance policy qualifies as a deduction under Section 80C up to ₹1.5 lakhs4(under the old tax regime) Moreover, the death or maturity benefits (subject to conditions mentioned therein) received are also exempted from tax under section 10(10D)5, making life insurance a suitable choice for financial protection and tax planning.

Moreover, with the different types of plans, you can choose a suitable life insurance policy for a specific financial goal. For instance

  • Term insurance plans help you plan against the risk of premature demise
  • Endowment and money-back plans can help you save and create a corpus for any financial goal
  • Child plans can help you create a secured corpus for your child’s future needs
  • Pension plans help you in retirement planning
  • Unit Linked Insurance Plans (ULIPs) can help you earn market-linked returns on your premiums along with offering insurance protection.
     

2. Claim the available deductions.
 

Chapter VI A of the Income Tax Act6 offers a range of deductions that can lower your taxable income which results in a reduced tax liability. You can use these deductions, ranging from Section 80C to Section 80U, and reduce your tax liability considerably (under old tax regime).
 

3. Choose the right tax regime.
 

The government introduced a new tax regime in the Union Budget 20207. Usually, under this regime, you can enjoy lower tax rates and a higher tax-free income threshold7, but you need to check your taxability under both regimes before filing. However, most of the deductions and exemptions available under the old tax regime have been foregone. As such, you can compare your tax liability under both the old and new tax regimes and suit one that offers the lowest tax liability.
 

Plan ahead and maximise tax savings.
 

Don’t wait till March to start investing in tax-saving avenues. Start early and get time on your side. Remember, the early bird catches the worm. So, start saving in investments that offer tax benefits so that you can plan your taxes from January itself.
 

FAQs
 

1. In which month do employers deduct tax from salary?
 

Employers deduct the expected tax from your salary every month before the salary is credited.
 

2. Why is tax saving needed?
 

Tax saving is important to allow you to use the available income tax provisions to your advantage. With tax savings, you can reduce your tax liability and save more. Enhanced savings will give you a higher disposable income to invest so that you can create a good corpus for your financial goals.
 

3. What is the last date for investing in tax-saving avenues?
 

The last date for investing in tax-saving avenues is 31st March which will allow you to enjoy a reduced tax liability in the same financial year. If you invest beyond 31st March, such investments will qualify for tax savings in the next financial year.
 

 

 

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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility

BJAZ-WEB-ECNF-12453/25

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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*Not available if policy issued after 14th July 2025.

 

^Benchmark: Nifty 500 Multifactor MQVLv 50 Index past 5 CAGR Returns, as on 30th May 2025. Past returns of a fund are not necessarily indicative of the future performance of the fund. | Please consult the financial advisor before investing.

 

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

 

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Bajaj Allianz Life Insurance Company Limited is only the name of the Life Insurance Company and Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V02), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01),  Bajaj Allianz Life Fortune Gain II- A Unit-linked Non Participating Individual Life Savings Insurance Plan (UIN- 116L196V02) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V03) are only the name of the unit linked insurance contracts and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com ) carefully before concluding a sale.

 

Nifty 500 Multifactor 50 Index Fund is available Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V02), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01), Bajaj Allianz Life Fortune Gain II- A Unit-linked Non Participating Individual Life Savings Insurance Plan (UIN- 116L196V02) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V03)

 

In addition to the already existing funds, Nifty 500 Multifactor 50 Index Fund is now available with the above mentioned products. Customer has an option to choose from other available funds apart from Nifty 500 Multifactor 50 Index Fund

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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