Tax Investment – Do it Right to Make Your Dreams Come True
When you're young, you have many dreams that you wish to accomplish over the years.These dreams are never too far away if you plan well for them. A financial plan is an essential step to set the foundation for a stable and secure life. When you do not have to worry much about money, you can focus on fulfilling your dreams. Planning for the finances will be beneficial for you in the long run, and you must start with it as early as possible.
At the starting point of your career, you may find it challenging to balance your expenses and savings. When you begin earning, you might not know you need to save on taxes, which is essential.Knowing about the best investment plans for tax benefit can help you save your hard-earned money. Health or term insurance tax benefits are mostly known to all. Alongside this, there are other investment plans for tax benefits that work as a bridge for you to achieve your goals.
Here are some of the best investment plans for tax benefit you can consider:
Unit Linked Insurance Plans are an excellent choice for investment and tax-saving. With ULIPs, you get life coverage under a life insurance policy, along with the benefits of investing in debt or equity schemes.A portion of your premium is used for the insurance policy, while the rest is spent in diverse financial instruments.
Most people prefer investing in term insurance for tax benefits. ULIP adds to it considerably as it also helps in wealth creation.The flexibility you get with a ULIP makes it one of the best investment plans for tax benefits.It allows you to invest in varying proportions, unlike mutual fund policies.You can even switch between debt or equity schemes. The unique combination of investment and protection offered by ULIPs is ideal for wealth creation and tax-saving.
You can use an online ULIP premium calculator to know more about this investment option.
Public Provident Fund (PPF) is one of the best investment plans for tax-saving in India. Under section 80(C) of the Income Tax Act, yearly contributions of upto Rs. 1.5 lakhs are eligible for a tax deductionin this long-term investment plan. Additionally, the interest received from the fund, as well as the amount received upon maturity of the policy,is tax exempted. Since the maturity period of a PPF is 15 years, it is an excellent instrument for tax-free wealth creation over time. Early investment in a PPF enables you to fulfil your dreams in the future, while also enhancing your tax benefit.
3. Health Insurance
A health insurance policy must be on your list of investments as a tax-saving measure. The uncertainty of life and the rising medical expenses have made it a necessity to buy health insurance.
With a health insurance policy, you get protection against medical emergencies along with tax-saving benefits. The annual premium paid for the health insurance policy is eligible for tax deduction under the Income Tax Act. It is like a life or term insurance tax benefit offered to the policyholders.
4. Retirement Plan
To live the golden years of life without financial worries, you must plan for your retirement.There are different types of retirement plans available in the market catering to different needs. For instance, Max Life Insurance is a reliable company offering a range of retirement plans with features like pay-out flexibility, choice of retirement age, partner care rider for spouse and many more. It makes sense to purchase a retirement plan early in life to accumulate wealth for a later age. To add to that, you get tax exemptions on retirement plan premiums, which makes them one of the best investment plans for tax benefit.
Financial planning at an early age implies considering the best investment plans for tax benefits to avoid wasting your income. Term insurance tax benefits are quite popular among people. However, there are many other ways to invest your money to get tax benefits to help you fulfil your dreams.