By the end of March, every salaried as well as business person is worried about getting the financials sorted. In addition to the financials, every person is worried about paying the right amount of income tax.

Income tax is levied by the government on the earnings of all salaried individuals as well as business owners. The amount paid varies from person to person, depending on the tax slabs decided by the Income Tax Department of India. Many of you will feel the pinch of income tax as more than 10% of your annual income is contributed towards it.

In order to alleviate the stint of this pinch, Income Tax Department has drafted several rules and regulations that help individuals minimize the amount of income tax. Some regulations recommend individuals to purchase different kinds of investment vehicles like fixed deposits, bonds, mutual funds, insurance, etc. for gaining tax exemption. Insurance plans like Max Life Tax Savings Plans are some of the few attractive tax savers that offer the benefit of savings as well as life cover.

These policies specifically offer tax benefits to individuals by offering long term savings. According to Section 80C and 80CCC, investments up to Rs. 1 lac in these instruments will offer substantial amount of tax exemption. Furthermore, purchase of health insurance plans will offer certain tax benefits under Section 80D of Income Tax.

For life insurance contracts, the amount of sum assured received at the time of policy maturity will be exempted from taxation according to Section 10D. The same is applicable to the sum received under Keyman insurance policy.

Even if you prefer fixed deposits or bonds for tax-saving, you will not gain any kind of tax-exemption at the time of maturity. In addition to this, they will not offer any kind of life cover. So, why choose such conservative instruments for tax savings, when you can get a better deal with insurance plans.