3 Smart Tax Saving Moves to Make


With the fiscal yearend barely around the corner, you may be wondering how to put your idle savings to good use while reducing your tax burden at the same time. All too often, unsuspecting investors fall into the trap of purchasing fruitless endowment insurance plans that are sold in the guise of low risk investments that generate high returns, only to discover later that they weren’t really value creating at all. Avoid them at all costs and consider these three “smart” tax saving moves instead.

ELSS (Equity Linked Savings Schemes)

Although equity market returns disappointed in 2018, ELSS funds remain a strong long-term proposition for putting your funds to good use. For tax saving, ELSS Mutual Funds Sahi Hai! Although high risk in nature, ELSS funds have the potential for delivering inflation-beating long-term returns. In addition, they have a relatively short lock-in period of just three years. For best results, start a monthly SIP (Systematic Investment Plan) I an ELSS in April 2019, that will put your tax savings for next year on auto-pilot. Your ELSS investments are tax deductible under Section 80C.

Term Insurance

If you have family members who are financially dependent upon you, it’s vital to have adequate term coverage in place. Term Insurance is the purest form of life insurance, in the sense that it does not have any ‘savings’ element attached to it. In case of the unfortunate loss of life of the insured person, the nominee receives the pay-out. Two things to keep in mind while purchasing term insurance: One, make sure you disclose all your information accurately or your claim may be dishonoured later.  Two, limit your coverage term to the age of 65, as it gets prohibitively costly after that. In any case, you’ll likely have acquired sufficient assets by that life stage, and your dependents will be settled too. Term Insurance premiums are deductible under Section 80C

Health Insurance

With medical costs escalating at the speed of knots, and lifestyle diseases becoming rampant, not having adequate health insurance in place is a foolhardy move. Just one medical emergency could be enough to set your financial plan back by years! Aim for a cover of at least 3-5 lakhs per family member, and keep renewing your policy religiously. Your health insurance premiums are deductible under Section 80D, and it’s money well spent.

Tax Saving ELSS Insurance

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