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    TAXATION

    5 Easy Tax Savings Option for Freshers in India 2020

    Last Updated On 28-07-2020

    Tax saving helps an investor in reducing their taxable income, thereby helping them save more, both in terms of savings as well as income. In the present scenario, with a slew of investment instruments that offer tax saving options, it is quite difficult for a financial fresher to choose the most appropriate one.

    Before, going into the details of tax saving options, let us list down the primary ways to save tax:

    How to Save Tax?

    The tax-saving season begins from 1st of April for every taxpaying citizen of India. If you happen to be an income taxpaying citizen, your primary goal is to reduce the taxable income to zero by making adequate investments under different categories provided by the various sections of the Income Tax Act. In this regard, it is highly recommended that the tax-planning starts right from the first quarter of the fiscal year instead of scampering in the final months.  This gives you a better chance of saving the maximum permissible amount under the Act.

    Tax saving options for freshers:

    The foremost financial investment one should consider are life insurance products. Once you start earning, it is imperative to safeguard the financial future of your family against income loss, pending obligations or any other financial emergencies that may arise after your unfortunate demise.

    Life Insurance plans accord two significant tax benefits:

    1. Tax deduction under Section 80C
      Tax saving under 80C includes reduction of taxable income is possible up to Rs. 1,50,000.  This includes most of the insurance schemes as well as other government saving instruments.
    2. Tax exemption under Section 10(10D)
      This is more of a tax exemption than a tax-saving option. Here, the proceeds of insurance products such as death benefits or maturity benefits are exempted from being taxed. This means that if you have purchased insurance products, the tax-saving is two-fold – both in premium payment and insurance proceeds.

    List of tax saving life insurance plans for freshers:

    1. Term insurance plan
      In the case of term insurance, you are able to invest for a specific period of time and get life protection only for the respective time period. As, there is no saving component in this policy, the premium that is to be paid is quite low. Therefore, it is quite popular among the Indian middle class as an insurance product as well as a tax-saving option.
    2. Endowment policy
      Endowment Policy differs from the term insurance only in the savings component. It is due to this saving component that the premium also increases, which, when paid, reduces the taxable income. It also has a combination of death benefit with its tax exemption component in the proceeds that is provided to the insured person at the end of the maturity period.
    3. Unit Linked Insurance Plan
      This plan offers two-fold benefits – wealth creation and life cover. In this plan, the paid premium is divided into two parts as per your requirements, of which one goes for the purpose of life cover while the other is invested in debt or stock market in order to create more wealth. Additionally, this plan provides the insured person with an option to withdraw the amount partially.
    4. Money Back Policy
      This policy is specially made for those individuals who prefer regular pay-outs at certain intervals during the policy term. The division of the survival benefits to that of the death benefits depends on your specific requirements as well. There is also a saving component that is quite similar to an endowment plan, which makes it quite beneficial, especially as you have tax benefit as well as regular pay-out to cater to your regular financial needs.
    5. Comprehensive Life Policy
      A comprehensive life insurance plan offers extended coverage for the whole life span of the insured. This life insurance plan offers the maturity benefit to the policyholder along with a death benefit to the nominee.  Moreover, the policyholder can also opt to withdraw the sum insured partially. The policyholder also has the option to avail a loan against the policy.

    Conclusion
    Before availing any insurance product, one must read the policy documents thoroughly before putting in your money. Most of them have various conditions in the form of exclusions and inclusions, which must be carefully read before enrolling.

    Know more long term savings plan and mera term plan on PNB MetLife

    Disclaimer:

    The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.

    PNB MetLife India Insurance Company Limited ,
    Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka.
    IRDAI Registration number 117 | CIN U66010KA2001PLC028883.
    PNB MetLife Mera Term Plan is an Individual Non-Linked, Non-Participating, Pure risk premium Life Insurance Plan | Product UIN Number – 117N092V03
    #Maximum maturity age: 99 years for all options (except Joint Life cover option), Joint Life Cover option: 75 years (applicable for both Primary & Secondary life).
    For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
    Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
    The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
    Call us Toll-free at 1-800-425-6969.. Phone: 080-66006969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203

    AD-F/2020-21/00185

    BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS /FRAUDULENT OFFERS
    • IRDAI is not involved in activities like selling policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.

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    Collapsed Expanded

    As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at claimshelpdesk@pnbmetlife.com or indiaservice@pnbmetlife.co.in. You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.

    PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance PlansTerm PlanProtection PlansLong Term Savings Plans , Retirement Plans & Child Education Plan.

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