Save Tax

Taxes can be saved through insurance, fixed-income options or equity-linked investments like ELSS. However, it is extremely important to pick up the right tax-saving option that matches your investment objective and horizon. Here are a few pointers to help you pick the right tax-saving options this year. Saving tax through insurance Buying an insurance cover is not always the smartest way to save taxes under Section 80C. Especially when you are buying life insurance plans with an investment element in them. Such plans offer very little life insurance cover. They are also not an ideal investment option as they mostly offer modest returns. Further, getting rid of these plans may result in losing a part of the money invested. However, most taxpayers accumulate such plans over a period during their last-minute shopping. Stay away from such plans this financial year. Life insurance is meant to support the dependents of an earning member. However, when the insurance cover is not large enough to take care of the financial needs of dependents, the whole purpose is defeated. That is where term insurance products come in. Term insurance plans have a very low premium and y

This article was originally published on April 29, 2021.