Financial Planning Guide, Best Investment Plans | Aviva India Skip to main content

6 Step Guide to Planning Investments Better

Investing is not a mere formality where you blindly put in your money in the ‘hot schemes’ and forget it while speculating growth. Your personal finances and investments deserve a careful analysis, especially when it comes to tax saving and projected returns in the future. However, many investors tend to follow the herd’s way when it comes to investment in India, losing crucial time and potentially higher returns vis-a-via tax savings.

So, it is time to level-up your investment strategy to make investments with high returns!

Here is an easy-to-follow 7 Step guide to planning investments better, incase you haven't already, for the financial year.

1.Include Life Insurance in Your Portfolio

It goes without saying that life insurance is a critical asset, something that will you’re your family and loved ones secure in your absence. Moreover, you can get immense tax deduction benefits against your life insurance policy. You can avail a maximum deduction in tax of up to 1.5 lakh Rupees under the section 10D. This deduction is applicable to any kind of life insurance product i.e. term insurance, savings cum life insurance plan, etc. Besides getting a financial cover for your family, you get significant tax benefits if you include Life insurance in your portfolio. If you haven’t already, include it today!

2.Include Equity Linked Savings Scheme in Your Investment Strategy

Did you know that a suitable Equity Linked Savings Scheme or ELSS plan can get you higher returns over long-term! ELSS plans invest your money into Equity mutual funds, and also give some tax benefits under the section 80C. ELSS is also known as tax saving mutual funds, and usually yields consistent returns for long-term investment durations. However, the gains from ELSS are liable for taxation on maturity. The gains are taxed at 10 percent above the gains of Rupees 1 lakh. ELSS is considered as one of the best investment plan with high returns. They also come with shorter lock-in period so liquidity never becomes a problem.

3.Include Health Insurance

While health insurance does not directly give your returns in the form of growing money, the benefits it brings with it are nothing short of that! Firstly, a health insurance spreads the risk of your medical liabilities and offers protection to your family and loved ones. Secondly, health insurance policies can be extremely effective in claiming significant tax deduction. You can claim a tax deduction of up to Rupees 25,000 under section 80D against the policy for your parents, children or whole family. It must however be noticed that the tax benefit against health insurance is not allowed against group health insurance policy given by employers.

4.Invest in National Pension Scheme

If you are working in the private sector, getting a pension after retirement is still possible. National Pension Scheme or NPS is one such government backed scheme where your monthly contribution is invested in equities, government securities, and bonds. You also have a choice to automate your investment or decide the investment ratio in equities, securities, and bond yourself.

The best thing about this investment option is the tax benefits and the lowest possible investment amount to open an account. You can get a maximum tax deduction of 1.5 lakh under the sections 80C and 80CCD, and begin investing with as low as Rupees 500 a month. The Maturity amount is disbursed once you turn 60-years of age.

5.Don’t miss out on the PPF!

PPF is another popular investment option amongst employees looking to grow their money in the long run. Public Provident Fund is a Government backed investment scheme for Indian citizens. It is a risk free scheme as the returns are guaranteed. The interest rate for PPF is decided by the government quarterly. Currently, the ROI for PPF is 7.6%. You can start investing in the PPF scheme by saving a part of your salary every month regularly. It must be noted that the lock-in period for PPF is 15-years. You also get a tax benefit under 80C, thereby maximizing your return on investment!

6.Education can Bring Tax Benefits

The best tax saving investment plan a person can follow is the investment in education. And, it might strike as a surprise to you that investment in education can yield tax benefits for you. Under section 80C, you can claim tax deduction of up to 1.5 lakh Rupees on the tuition fee paid by you. It must be noted that the deduction can be claimed only for the fee paid for a full-time professional course. Nevertheless, this can strengthen your investment portfolio by saving significant amount in taxes.

So, now you have curated investment options to look for in the remainant of the financial year 2019-20. Reap the dual benefits of interest gains and tax saving with by incorporating the above-mentioned pointers in your investment strategy. Happy wealth building!

Oct 59/19

Talk to an Expert

Leave a Reply

Add new comment

Filtered HTML

  • Web page addresses and email addresses turn into links automatically.
  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.