The deadline for making tax-saver investments – March 31 – is just around the corner, but the chances that many taxpayers are yet to complete this exercise are high. It is no secret that many postpone the process until it cannot be put off any further. The reasons for such inertia are many – hectic financial year-end, the perception that the task is tedious and also concern that intermediaries could take them for a ride.
However, such individuals need not panic, even if March 31 is just a few days away. Instead of dealing with distributors and cumbersome paperwork, you can simply go online to complete the process within a matter of minutes.
Equity-linked savings schemes (ELSS) are amongst the most sought-after tax-saving instruments under section 80C, which allows deduction of up to Rs 1.5 lakh. Not only does ELSS entitle you to this tax benefit, but it also does not attract long-term capital gains tax on profits made either. Moreover, its lock-in period is only three years, shortest amongst all 80C instruments. Most mutual fund websites allow investors to register and invest directly, provided your know-your-customer, or KYC, the process is complete. In fact, some websites have also enabled e-KYC, making the process quick and completely paperless. If you have the ability to choose to analyse the financials and the risk attributes, by investing in the direct plan of the fund of your choice, you will save on distributors’ commission too. Similarly, you can also invest in ELSS funds through fund aggregator portals. But before you take the decision properly analyse the fund performance and other risk factors. But investing in ELSS when equity market is already near to it’s high can impact your returns.
Most banks allow their customers to open five-year tax saver fixed deposits, which form part of the 80C basket, through their websites. If you are an account holder, you only need to log in to your bank’s net banking platform and open a tax saver fixed deposit instantly, just like you would book a regular fixed deposit. Remember, however, that interest earned on these deposits will be taxed as per the tax slab rate applicable to you and timing your investment correctly is paramount.
Buying a term policy is a near zero-risk decision – you need not be concerned about taking a wrong call in a hurry. For one, it is a highly cost-effective cover that provides large life cover at low premium rates compared to the traditional endowment and unit-linked insurance policies (ULIP). Unlike investment-cum-insurance products, pure protection covers do not carry any lock-in period, though it is in your interest to keep the policy in force by renewing it every year to secure your family’s financial future. Online term policies can be bought through portals of life insurers as well as aggregators. It will not involve any physical intervention unless you need to go through medical check-ups.
Again, given that health insurance is a critical component of an individual’s protection portfolio, the decision to buy a cover is a simple one to make. You can visit websites of insurers to aggregators to make the purchase. Like online term plans, you can complete the entire transaction online, unless the underwriting process demands a pre-issuance health check-up.