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    What are Some of the Best Tax Saving Options for Salaried Employees?

    Last Updated On 05-04-2022

    Under the Income Tax Act, 1961, every individual earning an income must pay their due taxes to the Indian government. The income can accumulate from salary, house rent, commissions, professional fees, bank interest, etc. For salaried employees, their employees collect the tax on their behalf from their salaries and give it to the Income Tax (IT) Department. From the IT department, this tax gets remitted to the central government.

    While the central government relies on income tax for a major share of its revenue, it also encourages people to save tax and find the best tax-saving options. The best tax-saving options include tax-saving funds and investments. Here are the five best tax-saving investments for you to save tax every year.  

     

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    • Life Insurance

    Life insurance is one of the best tax-saving investments available. Under section 80C of the Income Tax Act, you can get back the premiums paid towards the life insurance plan of up to ₹1.5 lakh in a year. Not only does life insurance is a tax-saving instrument, but it also provides financial coverage to the family members of the policyholder on their demise. This financial coverage is in the form of a death benefit. The death benefits are exempt from tax per Section 10(10 D) of the Income Tax Act.

    • Unit-Linked Insurance

    Unit-Linked Insurance Plans or ULIPS are among some of the best tax-saving plans too that also provide a life cover. Here as well, under Section 80C of the Income Tax Act, you can get back up to ₹1.5 lakh from the premiums paid towards the life insurance component. ULIPs are a wealth-creating and tax-saving investment, so their dual nature is ideal for creating long-term wealth and saving tax along the way. Moreover, even the maturity benefit you receive under ULIPs are exempt from tax deduction per Section 10(10D).

    • Health Insurance

    Not only does health insurance secure you and your loved ones in the face of a medical emergency, but it also works as one of the best tax-saving plans. According to section 80C of the Income Tax Act, the premiums you pay towards the purchase of a health insurance policy are returnable. You can claim it back provided the threshold does not cross ₹25,000 if you buy the health insurance plan for yourself or your spouse and children. Or ₹50,000 if you buy the health insurance plan as a senior citizen/ for your parents.

    • Employees Provident Fund

    The Employees Provident Fund (EPF) is a retirement fund or scheme managed by the Employees Provident Fund Organization. Under this scheme, both the employee and employer pay a specific percentage (up to 12% of the former’s salary) in equal parts towards the fund up to a certain date. This contribution grows over time, and the accumulated fund value with interest earned is both exempt from tax deductions. The EPF is one of the most popular tax-saving funds available.

    • Public Provident Fund

    The Public Provident Fund or PPF is another one of the best tax-saving options for salaried persons. This is a retirement scheme, too; however, it is under the direct control of the Indian government. It is a long-term savings avenue that allows for investments as less as ₹500 and gives profitable returns by the end of its tenure. The maturity amount you receive after the tenure ends and the interest both are exempt from tax deductions. Note that the maximum amount you can invest in the PPF is ₹1.5 lakh.

    To conclude: 

    The Indian government relies on taxpayers for revenue collection and the smooth functioning of the country. However, it never discourages their earning citizens from saving tax and enables them to save tax wherever possible through various tax-saving funds, investments, and options. Apart from the five avenues mentioned, there are multiple other best tax-saving options you can select, salaried or otherwise. To know more about term plan, term insurance and long term savings visit PNB MetLife website.

    The income tax is levied on all earning individuals who fall under a taxable income bracket. The income tax is paid to the Government of India and is charged annually. However, there are several tax deductions and exemptions that you can claim to lower your tax liability. The Income Tax Calculator helps you ascertain your tax output for a financial year based on your taxable income. This can help you plan well and save tax using the tax-saving deductions and exemptions, if possible. 

    Disclaimer:

    The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.

    PNB MetLife India Insurance Company Limited
    Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
    IRDAI Registration number 117 | CIN U66010KA2001PLC028883
    For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
    Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time. Please consult your tax consultant for more details.
    Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
    The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
    Call us Toll-free at 1-800-425-6969, Phone: 080-66006969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203.
    Beware of Spurious Phone Calls and Fictitious / Fraudulent Offers!
    IRDAI is not involved in activities like selling insurance policies, announcing bonus or investments of premium. Public receiving such phone calls are requested to lodge a police complaint.

    AD-F/2021-22/840

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    As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at claimshelpdesk@pnbmetlife.com or indiaservice@pnbmetlife.co.in. You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.

    PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance PlansTerm PlanProtection PlansLong Term Savings Plans , Retirement Plans & Child Education Plan.

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