Protection and Wealth creation through Section 80C, 80D, 80CCG, 80CCD

Protection and Wealth creation through Section 80C, 80D, 80CCG, 80CCD

Income earned by an individual is subject to Tax every year, however there are some ways in which the amount of tax payable can be reduced. Selection of instruments to save tax must be based on the wealth creation and protection needs of the individual.

Equity Linked Savings Schemes (ELSS)

ELSS the tax saving investment with shortest lock-in period and the potential of higher returns. Equity linked savings scheme or ELSS, as they are popularly known, are diversified equity mutual fund schemes that provides capital appreciation and also qualifies for tax saving.

Amongst other tax saving instruments u/s 80C, ELSS not only has the potential to deliver higher returns but also has the shortest lock-in period of three years.

Key Features :

• Type of Scheme: Equity-oriented Scheme
• Asset Allocation: 80-100% equities
• Scheme Objective: Capital Appreciation

Tax Benefits :

• Investment up to a maximum of ` 1,50,000 is eligible for deduction under section 80 C. You can save a maximum of ` 46,350/- (depending on your income-tax slab)
• In addition to saving tax, the investor can benefit with ELSS as under
• Long term capital gain on equity oriented mutual fund are exempt from tax u/s 10(38)
• Dividends received from a mutual fund are exempt from tax u/s 10(35)

Research Recommended schemes :

• Axis Long Term Equity Fund
• Franklin India Taxshield Fund
• ICICI Prudential Tax Plan

 

Life Insurance

Life Insurance is a must have!

To save tax, Life Insurance plays an important role. It helps mitigate the financial burden of your dependents in case of your unfortunate death and also helps in saving tax.

You can choose from a pure protection no-return term insurance plan or a plan that provides for protection along with an investment option. Our advisors will be happy to assist you in selecting the right fund that meets your protection, investment and tax saving needs.

Tax benefits available under Income Tax Act, 1961 when buying Life Insurance:

Premium paid on Life Insurance policies up to ` 1,50,000 is eligible for deduction subject to conditions specified in section 80C. You can save tax up to ` 46,350/- (Tax benefit calculated on highest tax slab rate of 30.90% on premium of ` 1,50,000).

In addition, amount received on Death is tax free and maturity proceeds will be tax free subject to conditions as per Section 10(10D).

 

Save upto Rs 16995 u/s 80D

Health Insurance - A must in this age of rising healthcare costs

Over the last few years healthcare costs in India have spiralled upwards. There has never been a greater need for individuals and families to ensure that they are financially protected from the cost of a medical emergency.

Tax Benefits :

You can avail tax deduction upto ` 55,000.

The total maximum deduction that can be claimed under section 80D is as follows
Description	Health Insurance Premium paid in respect of		Total Deduction under Sec. 80D
	Self, Spouse & Dependent Children	Parents (whether dependent or not)
No-one has attained the age of 60 years	` 25,000	` 25,000	` 50,000
Assessee and his family is less than 60 years & parents are above 60 years of age	` 25,000	` 30,000	` 55,000

You can save tax up to ` 16,995 (depending on your income-tax slab).

 

Save upto Rs 5150 u/s 80CCG

Rajiv Gandhi Equity Savings Scheme

In addition to deduction available under section 80 C, all individual tax payers with income under ` 12 lakhs who are first time investors and can benefit from the Rajiv Gandhi Equity Savings Scheme (RGESS).

A maximum of ` 50,000 can be invested in approved stocks and mutual funds and the tax payer can claim 50 per cent of the amount as tax deduction under Section 80CCG. A maximum amount allowed for deduction is ` 25,000. The maximum tax saving possible under the RGESS will be ` 5,150/- , in addition to the allowable deduction under section 80C.

Tax Benefits :

• Allowable deduction of 50% on a maximum investment of up to ` 50,000 in approved stocks or mutual fund Tax
• Lock in of 3 year with blanket lock in of 1 year
• Investors can trade after 1 year with certain restrictions

 

Save upto Rs 15450 u/s 80CCD

Let your second innings be a new beginning to happiness

Second innings is a time to leave all your worries behind, be free of responsibility, and celebrate. All of us desire to live our lives based on our choices and be financially independent especially when it comes t o our retirement.

To help you fulfill your retirement plans, we suggest you to consider channelising your savings towards National Pension System (NPS).

NPS is a voluntary contributory pension scheme introduced by Central Government. It helps you accumulate a pension corpus during your work life for a peaceful retired life.

Tax Benefits :

You can avail tax deduction upto ` 2,00,000 paid as subscription to NPS. Click here to know more.  

If you have exhausted the tax deduction limit of ` 1,50,000 (u/s 80C), you can avail tax deduction of additional ` 50,000 (u/s 80CCD) and save up to ` 15,450 (depending on your income-tax slab).

Happy Investing