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What are Savings Plans? Why Should You Have One?
Additionally, the maturity amount received is tax-exempt under Section 10(10D) , provided certain conditions are met, such as the premium not exceeding 10% of the sum assured for policies issued after April 1, 2012.
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5. Wise and Planned Expenditure
A good savings plan should also be instrumental in saving tax. According to the 80c of the Indian Income Tax Act, 1961, the premiums of most life insurance savings plans can be deducted from taxable income up to Rs. 1 Lakh. Besides, under section 10D of the Indian Income Tax Act, 1961, the benefits of maturity and death are also subject to tax exemption. Thus, the savings plan is the most preferred tax saving instrument.