How Can You Save Tax With Money Back Plan?
Updated On Oct 21, 2021
The tax-saving season begins on April 1st of every year for both salaried and non-salaried individuals. As a savvy investor, you should look for tax-saving assets that not only save you money but also allow you to earn money without paying taxes. There are numerous creative ways to save taxes and maximize your savings potential. Tax preparation, on the other hand, is something that the majority of individuals put off until later. A better method is to start investing in the early quarters of the fiscal year when there is still time to prepare ahead of time and maximize the benefits of different tax-saving strategies.
How Can Money Back Plans Help You Save Taxes?
Under the Income Tax Act of 1961, the Indian government provides several tax exemptions and deductions on the assured savings scheme. These deductions can be claimed by the taxpayer when submitting a tax return. Deductions are subtracted from gross income, and tax is calculated on the net income at the relevant rate. If you are an educated and active tax planner, you will be able to comprehend how these deductions are calculated, and you will be able to plan your investment objectives and alter those plans to meet the aim of tax savings.
Money Back Plans are another tax-advantaged investment that not only saves money on taxes but also allows investors to make large returns on their money over time. Unlike previous generations of Money Back, the current generation of Money Back supplied by insurance companies does not contain premium allocation or administrative costs, resulting in better returns for investors.
Furthermore, by combining the benefits of insurance and investment, one can benefit from the income taxability of the premium paid toward the policy under section 80C of the Income Tax Act. Section 10(10D) of the IT Act exempts investment returns from taxation as well. Money Back schemes include a 5-year lock-in period and allow participants to invest at their leisure.
Investors also benefit from investing flexibility since they have a vast number of fund options to choose from. Furthermore, Money Back allows for three to four free transfers across funds each year. Furthermore, under Money Back Plans, one can make three to four free transfers across funds each year. Money Back's returns are entirely dependent on the fund's market performance, despite the fact that ULIPs are a lucrative tax-saving investing choice.
Despite this, the majority of taxpayers put off filing their taxes until the fourth quarter, leaving them with tough choices. If a person starts planning for tax-saving investments at the beginning of the fiscal year, the amount invested can grow over time and help the person accomplish their long-term financial objectives. These suggestions can help taxpayers manage their tax savings for the year and make wise investments in tax-saving equipment.
Also read - Know Who Should Purchase A Money Back Policy
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.