Which products can I choose to save on tax?

Which products can I choose to save on tax?

We will help you choose the right tax saving investment products from the following categories:

Life Insurance

(Section 80C, 80D and 10(10)D)

With tax savings, life insurance purchase becomes an effective long term savings cum protection option. Maximum tax saving through life insurance is 30,900.

Health Insurance

(Section 80D)

Health Insurance is a cost effective way to protect your family against medical exigencies. You can get health insurance for self, immediate family or parents. It can save you 10,815 on income tax.

Equity Linked Savings Scheme

(ELSS)(Section 80C)

ELSS is a category of mutual fund schemes that invest primarily in stocks and are eligible for section 80C benefits. Here too you can save up to 30,900 in income tax.

Infrastructure Bonds

(Section 80CCF)

Infrastructure Bonds are a new investment option introduced recently by the Government of India. Investments in these bonds up to 20,000 can save you 6,180 in tax.

 Life Insurance  :

Life Insurance is a must have!

Life Insurance is a basic financial need of all working individuals that have dependents relying on them for financial support. In fact, a life insurance policy is the first financial product considered by most individuals because financial security of family is of utmost importance.
In addition to protecting your family, life insurance can also be used to accumulate wealth for future needs. There are various options (listed below) available depending on the specific needs of the individual. Our advisors will be happy to assist you with these.

• Financial Security of the Family
• Child's Education
• Child's Marriage
• Wealth Creation
• Retirement

Tax benefits available when buying life insurance

Life Insurance policies issued in India come with added tax benefits that make these policies a cost-effective long-term protection cum investment option. They currently fall under the "EEE" regime i.e. the premiums paid, income earned, and payment of maturity proceeds or claims are all 100% exempt (E) from tax.

At the time of purchase of the policy, an investment of 1 lac or more can save you 30,900 in income tax. Of course you can choose to buy a policy for a larger amount but the tax exemption will be limited to an investment amount of 1 lac.

Kindly contact our tax advisor at a branch to help you plan your taxes. This service is available free of cost up to 31st March 2012.You can also use our online TaxAssist Calculator.

More on tax benefits through life insurance

On Premiums

Amount paid as premiums is eligible for deduction under Section 80C of the Income Tax Act. The maximum tax deduction possible is 30,900 on a premium amount of 1 lac.

On Premiums for Health Related Riders

Some of the critical illnesses riders hospitalization cash benefits and other health related riders attached to a Life Insurance policy may also be eligible for deduction under section 80D of the Insurance Act.This deduction is available to both Individuals & HUFs. The maximum amount deductible is 15,000 per year for an individual and 20,000 per year for a senior citizen. This can save 4,635 and 6,180 in tax respectively. Both can be clubbed together to avail the maximum benefit of 10,815.

On Death Claims/ Survival and Maturity Benefits

Payment by an insurer on survival (bonus, money back, etc.), maturity and death claim are exempt from tax for all eligible Life Insurance policies under section 10(10)(d) of the Income Tax Act. The only policies that are not eligible for exemption on payment on maturity or claim are Single Premium policies or policies where the sum assured is less than 5 times the premium paid.

ELSS : 

Equity Linked Savings Scheme – An extremely low cost growth option 

ELSS are mutual fund schemes that invest primarily in domestic equity markets. Historically, these schemes have given very good returns and have usually outperformed the equity markets. They come with a 3 year lock in period which in turn allows the fund managers to take more aggressive calls yielding potentially better returns.

ELSS is alsoan eligible tax-saving investment under SEC 80C of Income Tax Act 1961, where investment upto 1lac is eligible for deduction from your total income. You can save up to 30,900 in taxes by investing 1 lac in ELSS.
The key advantages of ELSS are:

• Tax benefits under section 80C with potential saving of 30,900 at the time of investment
• Dividends also tax free
• Zero long term capital gains tax on withdrawal
• Many different schemes and companies to choose from
• Potential formuch higher returns compared to other tax saving instruments
• Convenience and flexibility of investing with either a one-time lump sum purchase option or automatic monthly debits through SIPs

Axis Bank offers a variety of ELSS schemes. Kindly contact an advisor at our branch to know more. This service is available free of cost up to 31st March 2012.You can also use our online TaxAssist Calculator to help you plan your investments.

Health Insurance

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 sudden medical exigency.
To encourage purchase of health insurance, the Government of India has extended certain tax benefits. These are explained below.

• Health insurance for self and family - For individuals less than 65 years of age, an amount of health insurance premium paid subject to an upper limit of 15,000 is exempt from tax. This amounts to a maximum tax saving of 4,635.
• Health insurance for dependent parents who are senior citizens- For individuals above 65 years of age, the amount of health insurance premium paid subject to an upper limit of 20,000 is exempt from tax.This amounts to a maximum tax saving of 6,180.
• Health insurance for parents who are not senior citizens - A further deduction of 15,000 can be availed of by buying health insurance for your parents who are below 65 years of age. Their dependency on you isn´t necessary. This again results in a maximum tax saving of 4,635.

Kindly contact our tax advisor at a branch to help you plan your taxes. This service is available free of cost up to 31st March 2012.You can also use our online TaxAssist Calculator.

Avail tax benefits through Family Health and Silver Health insurance policies

Family Health

This is acomprehensive health insurance policy covering the entire family for the following:

• Hospital Reimbursement: Reimbursement of your hospital expenses in case of sudden illness, accident or emergency surgeries
• Hospital Cash Payout: Additional cash benefit for each and every completed day of hospitalization at a very competitive price.

Some of the benefits of the policy are:

• Income tax benefit under section 80D*
• Cashless facility at over 2300 empanelled hospitals
• Hospitalization expense reimbursement for non-empanelled hospitals
• Single floater policy option for the entire family
• Hospital cash benefits to take care of daily expenses
• All expenses incurred 60 days pre and 90 days post hospitalization are covered
• 130 day care procedures covered (which do not require 24 hours of hospitalization)
• Ambulance charges upto 1,000 covered
• Pre-existing illnesses covered after 4 years

Silver Health

This policy offers senior citizens access to cashless benefitsand medical reimbursement for hospitalization expenses due to illness or accident.
Some of the benefits of the policy are:

• Tax benefit: Tax benefit under section 80 D of the Income Tax Act*
• Hospitalization expenses: The policy covers hospitalization expenses and anamount equivalent to 3% of the admissible hospitalization expenses in respectto any and all pre and post hospitalization expenses
• Cashless Facility: Access to the cashless facility at various network hospitals across India. (In case of treatment at a hospital outside the network, the expenses shall be reimbursed within 14 working days with20% of co-payment to be paid by the member)
• Pre-existing Illnesses: Pre-existing illness covered from the second year of policyonly up to 50% of the limit of indemnity in a policy year.
• Ambulance Benefit: Covers ambulance charges in an emergency subject to alimit of 1,000
• Indemnity: The policy has a lifetime indemnity limit of three times the limit ofindemnity specified in the earliest senior citizen plan, if the policy is renewedcontinuously
• Bonus: Cumulative bonus of 5% to the Limit of Indemnity for every claim freeyear and a family discount of 5%
• Health check-up: Health checkup in designated Bajaj Allianz diagnosticcentres at the end of four continuous claim free years

For more details on Family Health, Silver Health or other tax saving options, please contact an advisor at an Axis Bank branch.

Infrastructure Bonds :

Infrastructure Bonds- A new tax saving option

Infrastructure Bonds are a new investment option introduced recently by the Government of India. Investments in these government notified bonds up to 20,000 can save you 6,180 in tax u/s 80 CCF. This benefit is over and above the tax benefits available u/s 80C.

Infrastructure Bonds offer fixed rate of returns for varied tenors much like bank fixed deposits but with the added advantage of tax benefits.

To invest in Infrastructure Bonds, kindly contact our advisor at a branch. This service is available free of cost up to 31st March 2012.You can also use our TaxAssist Calculator to plan your taxes.
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Source : axisbank