Bill Copeland once stated, “The problem with not having a steady goal is that you can keep running around the field and never score.” The statement fits correctly when it comes to achieving financial goals. If you know what you want to accomplish in life, you can start working towards them. Otherwise, your finances get wasted in unnecessary things.
Each individual has a distinctive set of goals and aspirations. The only thing that does not change is the need for a well-thought financial plan that aligns with those goals. Financial planning should always match up with important milestones in life such as retirement and your child’s education. To efficiently plan your finances, you can leverage the available investment plans. These plans are easily customizable and provide a number of benefits including significant tax benefits.
In this article, we will look at some of the popular income tax saving schemes and the goals that such schemes can help you achieve.
- Creating Wealth
Wealth-creation is something everyone strives for. Every day, we wake up with a single thought of increasing the money in our accounts. And with an instrument that offers both the option of wealth-creation and tax savings, it is just cherry on the cake.
ULIPs or Unit Linked Insurance Plans are investment tools that are considered one of the most significant wealth creation instruments available in the market. They not only offer wealth creation opportunities, but also provide life cover to protect your goals in your absence. Moreover, when you invest in ULIPs, you become eligible to claim tax deductions up to Rs. 1.5 lakh under Section 80C.
- Ensuring Family’s Security
Ensuring your family’s security is one thing that is always on your mind. Securing their dreams and aspirations even when you are not around is also important. Term insurance is one such tool that helps you in keeping your family’s finances straight, even in your absence. In this plan, your family gets a lump sum amount as sum assured after your demise.
Moreover, the premium amount paid towards term insurance is eligible for tax deductions under Section 80C up to Rs. 1.5 lakh. Not just this, in case of your sudden demise, the sum assured offered to your family as a death benefit is also not taxable under Section 10(10D).
- Protecting Your Child’s Future
If you are a parent, you will always want to fulfil every dream of your child. It can be quality education, the choice to pursue any career, capital for business or any other specialized need he/she might have. Therefore, as a parent, it is essential that you invest in a child plan to secure your child’s education.
These days, customized child plans are offered by many leading insurers, including, Future Generali to cater to your needs. Moreover, by investing in a child plan, you qualify to claim deductions up to Rs. 1.5 lakh under Section 80C.
- Managing Your Healthcare Expenses
Health care expenses nowadays are no piece of cake. One major illness can wipe off the entire savings you might have and destroy the goals you wish to achieve with that money. Thus, to protect your dreams and goals, it is imperative that you purchase health insurance.
When you invest in health insurance, you become eligible for claim tax deductions under Section 80D. The exemptions allowed under this section are:
- Rs 25,000 – For Self, Spouse and Children
- Rs 50,000 – For Senior Citizens
- Planning for a Comfortable Retirement
A comfortable retirement might just be your most important life goal – a time when you can pursue everything you want without being concerned about extra responsibilities. However, the comfortable retirement you wish for will also require a good amount of money.
To achieve this, you must start investing in different retirement or pension plans. Once you begin investing in pension plans, you can claim tax deductions under Section 80CCC up to Rs. 1.5 lakh.
Achieving your long-term and short-term financial goals has nothing to do with luck – it’s a matter of smartly setting milestones and achieving them one by one. The best way to do that is to list down your goals and use various income tax saving schemes to achieve those goals. Once you begin investing, keep your portfolio under constant observation to boost your progress.