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Frequently asked questions
The choice of the best ELSS fund varies based on individual financial objectives, risk appetite, and the duration of the investment. Evaluating factors like past performance, fund manager expertise, and portfolio composition can help identify a suitable option.
Equity Linked Savings Scheme (ELSS) is a category of mutual funds that invests primarily in equity and equity-related securities. These funds offer tax benefits under Section 80C of the Income Tax Act, making them a popular choice for individuals looking to save on taxes while potentially earning higher returns.
PPF and ELSS cater to different financial objectives. PPF is a secure, long-term investment with a 15-year lock-in period, offering fixed returns. On the other hand, ELSS is an equity-based investment with a shorter 3-year lock-in and the potential for higher returns, but it involves market-related risks.
Equity Linked Savings Schemes (ELSS) are widely regarded as an effective option for tax saving. They combine the potential for higher returns through equity investments with tax benefits under Section 80C.
ELSS can be advantageous for both tax-saving and wealth-building purposes due to its exposure to equities. However, since it is linked to market performance, investors should assess their risk tolerance and financial goals before investing.
ELSS funds often deliver better returns than fixed-income options due to their focus on equities. However, returns are subject to market conditions and are not guaranteed. It’s essential to consider historical performance while remembering that it may not predict future results.
ELSS investments can be made at any time of the year. Investing early in the financial year (April to March) allows for greater market exposure and helps avoid last-minute rushes for tax-saving. For long-term investors, the timing is less significant due to the mandatory 3-year lock-in period.
The premium for a health insurance plan depends on several factors, including the type of coverage, the applicant’s age, medical history, and any additional riders or add-ons chosen. Selecting a plan that provides adequate coverage for your healthcare needs is crucial. Bajaj Finance offers a range of health insurance plans from leading insurers, providing flexible options in terms of coverage and premium amounts.
Health insurance policies allow multiple claims during a policy term, provided the total claims remain within the maximum sum insured under the policy.
Pre-existing diseases are medical conditions that an individual has been diagnosed with or treated for before purchasing a health insurance policy. Examples include heart conditions, diabetes, asthma, thyroid disorders, and cancer.
Many health insurance policies do not cover pre-existing conditions immediately. Some insurers offer coverage for such conditions but include a waiting period, during which claims related to these conditions cannot be made. This waiting period typically ranges between 2 to 4 years, depending on the insurer and the policy.
A waiting period refers to the time between purchasing a health insurance policy and becoming eligible to claim its benefits. During this period, claims are generally not entertained. Waiting periods vary across insurers and policies, ranging from 30 to 90 days for general coverage to 2-4 years for pre-existing conditions. It’s important to review the waiting period details before buying a policy to avoid any surprises.
List of Tax Saving Investments and Schemes in India
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Fixed Deposit
Fixed deposits provide assured returns upon maturity and are a safe investment option for individuals with low-risk tolerance and a medium-term financial horizon. Fixed deposits with a tenure of at least five years are eligible for tax deductions of up to ₹1.5 lakh annually under Section 80C of the Income Tax Act, 1961, subject to certain conditions.
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Mediclaim or Health Insurance
Health insurance plans, commonly known as Mediclaim, cover medical expenses arising from illnesses or accidents. These plans offer financial security for hospitalisation and related healthcare costs. Additionally, they come with tax benefits under Section 80D of the Income Tax Act, 1961. Policyholders can claim deductions of up to ₹25,000 for themselves and their families (₹50,000 for senior citizens) and an additional ₹25,000 (₹50,000 for senior citizen parents) for their parents' insurance premiums.
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ULIP
A Unit-Linked Insurance Plan (ULIP) combines investment opportunities with life insurance coverage. By investing in market-linked funds, ULIPs help individuals achieve their financial goals while offering protection in case of unforeseen events during the policy period. Premiums paid towards a ULIP qualify for tax deductions of up to ₹1.5 lakh annually under Section 80C of the Income Tax Act, 1961. The payouts from the policy are also exempt from tax, subject to the terms outlined in Section 10(10D) of the Income Tax Act, 1961.
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Endowment Plans
Endowment plans are long-term savings instruments that combine financial security with life insurance coverage. They are designed for disciplined savings and help achieve significant goals like funding education, purchasing a home, or traveling. These plans offer guaranteed returns and life insurance protection, with premiums eligible for tax deductions of up to ₹1.5 lakh per annum under Section 80C of the Income Tax Act, 1961. Additionally, the maturity amount is tax-free under Section 10(10D), subject to conditions.
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Term Insurance
Term insurance provides pure life coverage, ensuring financial protection for loved ones in case of untimely events during the policy term. It offers tax benefits under Sections 80C, 80D, and 10(10D) of the Income Tax Act, 1961. Premium payments qualify for deductions of up to ₹1.5 lakh under Section 80C. Payments made towards health-related riders, such as critical illness cover, can be claimed under Section 80D. The policy benefits are also tax-exempt under Section 10(10D), subject to specified terms.
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Tax-saving mutual funds
Equity-Linked Savings Schemes (ELSS) are mutual funds focused on equity and equity-related instruments. They are a popular tax-saving investment for individuals willing to take moderate to high risks for potential long-term growth. Investments in ELSS qualify for tax deductions of up to ₹1.5 lakh annually under Section 80C of the Income Tax Act, 1961.
Disclaimer For Health Insurance
T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company. Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.
Disclaimer For Life Insurance
T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company. Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.
Disclaimer For Mutual Funds
As per present tax laws, eligible investors (individual/investors) are entitled to deduction from their gross income of the amount invested in Equity Linked Savings Scheme (ELSS) UP TO 1.5 lakhs (along with other prescribed investments) under section 80C of the Income Tax Act, 1961. Tax-savings of ₹46,800 mentioned above is calculated for the highest income tax slab.
Disclaimer
Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as "Mutual Funds) with ARN No. 90319
BFL does NOT:
(i) provide investment advisory services in any manner or form:
(ii) carry customized/personalized suitability assessment:
(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment
In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice, Mutual Funds are subject to market risks including loss of principal amount and investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected try changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk, Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred try the investors. There may be other/better alternatives to the investment avenues displayed by BFL Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL, shall not be liable or responsible for any consequences thereof.
Bajaj Finance Limited (BFL) Is a distributor of Mutual Funds with ARN 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC Is a group company of BFL. carrying business on arm's length basis without any conflict of interest and in accordance with the prevailing law / regulation.