Best tax-saving options to explore before the March 31 deadline

financialexpress.com:

The end of the financial year is a busy time for taxpayers. As the deadline approaches, most people want to rejig their financial portfolio one last time to make the best out of tax-saving strategies. However, this last-minute shuffle shouldn’t be done without ample research and understanding of what you’re putting your money into.

While it’s common knowledge that insurance is a critical part of your investment portfolio, tax saving alone shouldn’t be the motive to invest in insurance. Simply allocating funds to a tax-saving investment plan is not the right approach. Financial planning also depends on your personal goals, age, risk appetite and other factors. So, before you buy insurance for tax saving, your decision must be aligned with your needs.

Here are a few popular financial instruments that you should know about and consider before making a decision:

Exempt under Section 80C, term life insurance is usually the go-to option for most tax-payers. Term life insurance is the purest form of insurance and provides financial security to the dependents in the event of policyholder’s untimely death. Individuals can also claim tax deduction for premiums paid toward term life insurance up to Rs 1.5 lacs under Section 80C of The Income Tax Act. It acts as a safety net to save your family from financial burden especially in case you are the sole earning member, so it’s important to not look at it only from a tax-saving lens. It’s prudent to take a coverage of at least Rs 1 crore, keeping in view the rising expenses, outstanding liabilities and inflation rate. In fact, there are plans that even offer a return of premium at no extra cost making term insurance more value-driven and cost-effective.

Also Read: How to get your full