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Are you really saving your taxes? Know your Tax slabs & review your investment plans now!
January, 22nd 2020

It’s that time of the year again, when our investments come again to the forefront. The investment receipts are all out, our inbox is full of mails urging us to claim our tax-saving investments and most of us are once again struggling to check if our investments are enough. The tax-filing season in India begins in early January and our last minute investments continue to be made for as long as March. While the tax-paying population in India is on the lower side, the income tax collection during 2018-19 amounted to ? 442,170 crore. This leads us to the important question - Is our investment plan doing the best for our current tax slabs?

This question is bound to torment you every tax-filing season. But with the right information, you can easily make investments that pay off. The first thing you need to ensure is that you have a portfolio that is tailored to cater to your taxability and you need to have a basic understanding of the various income tax slabs. If you are in the middle of the tax-pool, in the 20% bucket, chances are it may be easy for you to save taxes with some simple steps. However, it becomes very challenging if you belong to the higher tax bracket of 30%! And if you too are wondering how your investment plans currently fare, here’s what you need to know!

But first, check your tax slabs based on your taxable income -

In addition to this, people with a taxable income bracket of up to ? 5,00,000 also need to note that they are eligible for full tax rebate. This change, which was announced in last year’s Union Budget is a silver-lining for many who are looking to fully utilize their tax-benefits.

Now that you know your tax slab, the next step is to plan your investments depending on your lifestyle. Whether you are a single person keen on experiencing the different things in life, or a happily married couple planning for kids, there are some simple investment switches that you can make to ensure that your life-goals are never out of reach. This is especially true since the various aspects of saving taxes are far too diverse. From your home loan EMIs to your children’s tuition fee, there are tax exemptions for a variety of different things that you can benefit from. Here’s the area that you need to check -

For single folks busy exploring life
If you are one from the clan of wanders & explorers & are keen on travelling the world to find your own path, then ‘investments’ may very well be the ‘road not taken’. However, if you give it a thought, now seems to be a good time for you to consider a few investments that will come in handy for your future travels. If you already bear an education loan, then turning towards a trust-worthy life insurance plan is a must. The interest paid on your education loan in itself will bear you tax benefits under section 80E of the Income Tax Act. In addition to this, opting for a ULIP (Unit Linked Insurance Plan) can also help you fulfill all your aspirations. ULIP options like the HDFC Life Click2Wealth plan are a brilliant way of investing in market-linked instruments while curtailing the risk that normally accompanies it. The Invest Plus option of HDFC Life Click2Wealth Plan provides a life insurance while also taking care of your investment needs by providing accumulated fund value at the time of maturity.

In addition to this basic benefit, such investment plans in themselves help you save up to ? 1.5 lakhs. Under Section 80C of the Income Tax Act, the premium you pay towards these schemes offer tax-deduction. In addition to this, you can also consider a health insurance plan to claim deductions of up to ? 25,000 under Section 80D. The fact that the premiums for life insurance and health insurance are lower if you apply at a younger age is bound to be an added benefit.

The Happily Married Couple
If you are a happily married person, either planning to have kids or already have kids, then you need to ensure that these factors are accounted for in your investments as well! Your home loans, personal health insurance and life insurance plans might help you save over ? 20000, ? 88000 or ? 100000, in total, based on your tax slabs*. However, it is always advisable to recheck these investments to ensure your partners are also well-covered. etc.


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