For everyone, insurance policies provide the chance to save and to avail a wide range of advantages of avoiding paying expensive taxes. Like death, tax is also an important truth of life. It can be evaded, paid or avoided. In India, evasion of tax is a serious crime. Everyone should understand that paying taxes is a nation duty else government will be unable to run the country.
Indian government declares different tax incentives to increase savings. People who have crossed their tax benefits or don’t want to save their taxes pay it. The option of avoiding tax can be capitalized by availing benefit of these tax incentives.
Online insurance policies are one of the tools chosen by the Indian government to offer policyholders tax benefits. By investing your hard-earned money in health or life insurance schemes, insured is able to claim deductions on the premium amount paid every year.
Section 80C
Payment of term insurance premiums is eligible for deductions under this section. According to recent budget, government has hiked the deduction limit from Rs one lakh to Rs 1.5 lakh per annum.
Section 80D
This section makes for tax deduction from the overall taxable income for the payment of health insurance premiums. Under this section, it allows deduction for the payment of individual and his or her parents.
People should understand that health insurance premiums are considered as risk control investments, but not as savings. Policyholders’ medical expenses are covered by mediclaim policies online in case of an adversity.
The purpose of investing in health and life insurance policies is that all risks are insured under Section 80C and Section 80D. Health risk is insured under Section 80D whereas life risk is insured under Section 80C. Insurance is the only financial instrument that gives risk coverage and also offers you tax benefits along with financial returns.