rajkotupdates.news : tax saving of fd and insurance tax relief

Tax Saving of FD and Insurance Tax Relief

rajkotupdates.news : tax saving of fd and insurance tax relief, that the India, people often look for ways to save taxes and increase their savings. Two popular tax-saving options are fixed deposits (FDs) and insurance plans. In this article, we will discuss the tax-saving benefits of FDs and insurance plans and how they can help you reduce your tax liability.

Tax-Saving Benefits of FDs

Fixed deposits are a popular investment option among Indians, and they also offer tax-saving benefits. Here’s how:

a. Section 80C: You can claim a tax deduction of up to Rs. 1.5 lakhs under section 80C of the Income Tax Act, 1961, by investing in tax-saving fixed deposits for a minimum lock-in period of five years.

b. Interest Income: The interest earned on tax-saving fixed deposits is taxable. However, you can claim a deduction of up to Rs. 50,000 under section 80TTB for senior citizens and up to Rs. 10,000 under section 80TTA for other individuals on the interest income earned from FDs.

Insurance Tax Relief

Insurance plans, whether life insurance or health insurance, also offer tax-saving benefits. Here’s how:

a. Section 80C: You can claim a tax deduction of up to Rs. 1.5 lakhs under section 80C of the Income Tax Act, 1961, by investing in life insurance policies.

b. Section 80D: You can claim a tax deduction of up to Rs. 25,000 on the premium paid towards health insurance policies for self, spouse, and dependent children. In case the policyholder or any of the insured members is a senior citizen, the deduction limit increases to Rs. 50,000.

c. Section 80DD and 80DDB: If you have taken a health insurance policy for a disabled dependent or for yourself, you can claim an additional deduction of up to Rs. 75,000 under section 80DD. If you or your dependent is suffering from a specified illness, you can claim a deduction of up to Rs. 1.5 lakhs under section 80DDB.

Q: What is tax saving on FD?

A: Tax saving on FD refers to the tax deduction offered by the government on investments made in fixed deposits. These tax-saving FDs have a lock-in period of five years and offer tax benefits under Section 80C of the Income Tax Act.

Q: How much tax can be saved through insurance?

A: Tax can be saved on insurance premiums paid for life insurance, health insurance, and other types of insurance policies. Tax benefits can be availed under Section 80C and Section 80D of the Income Tax Act.

Q: What is Section 80C of the Income Tax Act?

A: Section 80C of the Income Tax Act offers tax deductions up to Rs. 1.5 lakh for investments made in various financial instruments such as fixed deposits, mutual funds, PPF, and life insurance policies.

Q: What is Section 80D of the Income Tax Act?

A: Section 80D of the Income Tax Act offers tax deductions for the premiums paid towards health insurance policies for self, spouse, and dependent children. The maximum deduction that can be claimed under this section is Rs. 50,000.

Q: What is tax relief on insurance?

A: Tax relief on insurance refers to the tax deduction offered by the government on the premiums paid towards life insurance policies, health insurance policies, and other types of insurance policies. These deductions can be claimed under Section 80C and Section 80D of the Income Tax Act.

Conclusion

Investing in tax-saving FDs and insurance plans not only helps you save taxes but also ensures financial security. It is always advisable to invest in such schemes to maximize your tax savings and secure your future. However, before investing, make sure to read the terms and conditions of the scheme carefully to make an informed decision.