How HDFC Life Retirement Plans Help You Save on Taxes?

 

As we make our way through our careers, a prime goal we seek to achieve is a smooth and comfortable life post-retirement. And indeed, it’s the monthly pension that keeps one tension-free in life beyond 60. This is where investment in a good pension plan can be crucial. Designed to make you save during your work life, these plans offer a chosen monthly pay-out after retirement offering a stability of regular income. HDFC Life Retirement Plans are a good example of such plans, as they take away your worries, taking care of your financial needs in your retired life. Alongside, they help you save on taxes too. 

Types of Pension Plans

Pension plans are majorly of two categories:

Immediate annuity plans: These plans require a one-time lump sum investment, based on which the subscriber gets regular payouts with immediate effect for the rest of his/her life. The frequency of payouts can be chosen as monthly, quarterly, half-yearly or annual.   

Deferred annuity plans: These plans let you pay regular premiums for a stipulated period. Post this savings phase, the policyholder can withdraw 1/3 of the accumulated corpus and use the remaining amount to buy an annuity plan. The annuity plan provides him with regular pensions throughout his life.

These plans can be further divided into two types: 

Traditional retirement plans: These low-risk pension plans let you invest in debt instruments like government securities that protect your capital, and are suited to the needs of people with low-risk appetite.HDFC Life Click 2 Retire plans can be classic choices here.

Unit-linked pension plans: For those who seek to earn high returns and plan to retire early, these plans can be ideal. Here, you can put your money into a mixed portfolio of equities, bonds, mutual funds etc, that generates high returns over a long investment horizon. HDFC Life Click 2 Invest ULIP plans fall in this segment.

Tax benefits of HDFC Life retirement plans

While retirement plans ensure the stability of regular income in your retired life, there’s something else to look forward to. These pension plans also provide you with tax benefits under Section 80CCC & 10(10A) under the Income Tax Act, 1961¹. Accordingly, you can deduct the amount of any investment made towards these plans from your gross income, saving taxes in the process. Naturally, the earlier you start, the greater the chance of getting bigger tax deductions and higher returns.

Tax deduction u/s 80CCC¹: Premiums paid in a financial year towards pension/annuity plan for receiving pension from a fund are eligible for deduction under Section 80CCC¹ up to the limit of Rs. 1,50,000/- in a financial year.

Tax exemption u/s 10(10A): Any payment received in commutation of pension as a lump sum on maturity is exempt under section 10(10A) of the Income-tax Act, 1961, subject to fulfilment of various conditions under the current income-tax law.

Any pay-outs under an annuity plan are taxable. Taxes are taken care of, a regular flow of income is ensured, and you get to enjoy your retired life in all comfort and leisure. For that, just pick the best pension plan available and start saving for a worry-free future!

Related Articles:

•  How to Choose the Right Pension Plan?
  
• The 30:30:30:10 Rule of Retirement Planning
  
• Haven't Saved for Retirement? Here Is How You Can Future Proof Your Lifestyle by Planning Now
  
• Is There Any Waiting Period in a Term Plan?
  
• How Term Life Insurance Cover Home Loan Risks?
  

ARN - ED/07/23/3207