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Popular Tax Saving Options 2013
Popular Tax Saving Options 2013
Dec 13, 2013 | 3338 VIEWS

We get a lot of queries on our website but sadly more than 60% of the queries are from policyholders who are unhappy with their policy purchase and want to exit the policy. Therefore, we make constant efforts to create awareness about the associated benefits of different kinds of insurance policies. There are many products in the market which offer tax benefits but merely taking a product on someone’s recommendation to save tax in the short-term can harm your finances in the long-term.


Listed below are some of the popular tax saving instruments available to us without much of a hassle. Also, I have categorized them under the respective section of Income tax law to make your life simpler while mentioning these in your Income Tax Returns.


1. Insurance

Income Tax Section

Product

Maximum amount of investment on which tax is exempted (Rs.)

Where to buy?

Section 80C

Life Insurance

1,00,000

Buy Online Protection Plans

-          Protection Plans

-          Savings/Investment Plans

Section 80D

Health Insurance


15,000
15,000

Buy Online Health Insurance

-          Self and Family

-          Dependent parents

Section 80DD

Paying insurance premium for physically disabled family member

1,00,000

 



As a special feature, you can find an excerpt of our earlier article on the top 10 popular online term plans in India. This list of plans should help you to quickly decide which term life insurance you can buy online instantly – zero commission, no paperwork and tax benefits.
 

Policy Name

Insurer’s Claim Ratio

Max Age at Maturity (yrs)

Unique / Outstanding feature

ICICI iCare

96.53%

75

No medical tests

HDFC Life Click 2 Protect

96.17%

65

-

SBI eShield

95.48%

70

Choice of Increasing cover

Kotak e-Preferred Term

92.10%

70

Option to step-up the life cover

Bajaj Allianz iSecure

90.61%

70

Option to take Death Benefit in Annual Installments

Aviva iLife

89.55%

70

-

Bharti AXA eProtect

87.70%

75

Family Care Benefit

Reliance eTerm

84.58%

70

Medical tests at doorstep

Tata AIA iRaksha Supreme

83.94%

80

Only plan with limited pay option

AEGON Religare iTerm

66.06%

75

Inbuilt Terminal illness rider

Get the Best Term Plan for you Calculate Premium Now

2. Traditional Savings Products

Income Tax Section

Product

Maximum amount of investment on which tax is exempted (Rs.)

Where to buy?

Section 80C

Fixed Deposits (5 yr)

1,00,000

Bank branch

Section 80C

Public Provident Fund (PPF)


3. Exemptions

Income Tax Section

Product

Maximum amount on which tax is exempted (Rs.)

Section 80E

Interest on Higher Education Loan

Full amount of interest

Section 80G

Donations, Charities

50% or 100% of the donation amount

Section 80GG

House Rent (only if HRA is not claimed)

25% of the total income, or

Rs.2000 per month, or

Excess of rent paid over 10% of total income.

Section 80U

For Disabled people

Rs.50,000 to Rs.100,000 depending upon the severity of the disease

 


Every section of the Income Tax Act which provides benefits and exemptions has its own clauses and T&C which are not very difficult to understand. Kindly read them carefully before using them so that you can save the right amount of tax – rightly!

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!

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