It is natural for all and you to look forward to saving a lump sum amount of your hard-earned money on taxes. No one would like to give their portion of earnings to lay in an inescapable net. There’s a way to save even on those hefty tax payments. In India, the government offers various tax benefits under the Income Tax Act 1961 to encourage taxpayers like you to save and invest in essential areas.
Now you must be wondering how you can calculate it or what deductions are there that you can avail of. For such matters, income tax calculators are there to help you understand how much tax you might owe and how much you can potentially save.
Let’s understand how tax benefits on insurance work and how you can evaluate them using an online calculator.
Tax Benefits to be Claimed Under the Income Tax Act 1961
The Indian Income Tax Act offers deductions for premiums paid towards specific insurance policies, ultimately lowering your tax liability. While there are many investing options, statistics show that in the financial year 2023, India’s insurance market touched over 40 trillion INR worth of investments.
Consequently, this makes it a popular investment, and this is why you must know the tax deductions available against them.
Here’s a breakdown of some common insurance plans with tax benefits under various sections:
Section 80C
When calculating income tax online, do remember about the section 80C. This section falls in the Income Tax Act 1961 under which you can claim tax deductions. You can claim the deductions in the life insurance premium paid for the following policies:
Life Insurance Policies: Premiums paid for most life insurance plans, including term plans, endowment plans, whole life plans, and Unit Linked Insurance Plans (ULIPs), qualify for deduction under this section. However, there’s a limit that is predefined in the online income tax calculator already. The deduction is capped at 10% of the sum assured on the policy or the actual premium paid, whichever is low.
Pension Plans: Premiums paid towards Employee Provident Fund (EPF), Public Provident Fund (PPF), National Pension System (NPS), and Unit Linked Pension Plans (ULIPs) also qualify for deduction under Section 80C.
The overall maximum deduction allowed under Section 80C is ₹1.5 lakh. This includes your contributions to all the plans mentioned above.
Section 80D
80D from the Income Tax Act is one of the sections that offer tax deductions on medical expenses.
Health Insurance Premiums
You can find out how much tax benefit this section offers for health insurance premiums by using an income tax online calculator.
The deductions for premiums paid towards health insurance policies can be availed for yourself, your spouse, dependent children, and your parents upto ₹25,000.
Deduction for Senior Citizens
The deduction limit for senior citizens (aged 60 years and above) with health insurance is ₹50,000. An additional deduction of ₹25,000 can be claimed for parents’ premiums (up to ₹50,000 if parents are senior citizens).
You can also claim a deduction of up to ₹5,000 for preventive health checkups for yourself and your family members.
How Does Online Income Tax Calculator Help Maximise Savings?
An online income calculator acts as a virtual tax assistant. While maintaining accuracy and allowing you to try different scenarios, it offers several other benefits. Here’s how it can be instrumental in maximising your savings through insurance:
Estimate Tax Liability: Enter your complete income details, including your salary, investments, and any other income sources, if any. The calculator provides an estimated tax liability based on your tax bracket.
Factor in Deductions: Input the amount you’ve paid towards insurance premiums. The income tax calculator will consider these deductions, showing you how much your taxable income can decrease.
Plan for Savings: Visualising the potential tax savings from insurance premiums can help you plan your investments more effectively. You can also explore increasing your insurance coverage or considering different plans to maximise benefits.
Maximise Your Tax Savings with an Income Tax Calculator Today!
An online tax calculator turns out to be a resourceful offering by insurance providers. It potentially lowers your tax burden and helps you achieve your financial goals. To secure the future for yourself and your loved ones, it is a must that you leverage the calculator from reliable websites like Canara HSBC Life Insurance.
It is an insurance-providing company with a range of tools that help you calculate income tax online. In addition to their range of online calculators, they offer different online insurance plans, such as iSelect Smart 360 Term Plan, INVEST 4G, and YOUNG TERM PLAN.
So, next time you’re filing taxes for AY 2024-25, remember to visit Canara HSBC Life Insurance’s official website to leverage their calculator.