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The tedious task of tax planning is one of the formidable challenges in the life of every hardworking individual in India. You must have heard many people around you, such as your colleagues, talking about filing their income tax returns. Generally, strategic investments can help people in reducing their taxes alongside achieving more savings.
One such investment is a term plan, which can help you earn tax benefits according to Sections 80C, 10 (10D) and 80D of the Income Tax Act, 1961. Around 1.5 crore Indians pay income tax, out of which almost 57% earn less than 25 lakhs INR per annum. At the same time, the Ministry of Finance has recently announced that the net direct tax collections increased by almost 121% from FY 2013-2014 to FY 2021-22. This post can help Indian taxpayers find how a term plan can help them score valuable tax benefits.
How Can Term Plans Help You Earn Tax Benefits?
The term plan is a preferred tool for obtaining life cover and offers the benefits of financial protection. The primary reason for which people choose a term plan is the advantage of higher life insurance coverage at affordable premium rates.
Term plans have been perceived as an instrument for providing financial stability to the insured in their time of need. Nominees of the sum assured in term plans can use the claims for replacing lost income or paying off debts. However, term plans could also offer the benefits of tax savings, thereby working as a strategic investment. It is important to understand Sections 80C, 80D and 10 (10D) of the Income Tax Act and how they offer tax savings.
Who Can Claim Tax Benefits with Term Plans?
The first thing you need to learn for tax savings with term plans is the eligibility criteria. Any tax-paying individual or a Hindu Undivided Fami… Read More
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