Question

Investing in ULIP plans exempts a maximum up to what limit for Income Tax 50000 75000 100000 200000

Answer 1

Explanation:

The Income-tax Act, 1961 has various sections taxpayers can use to reduce their tax outgo every year. And the most common sections in the Act that people use to save on tax are 80C, 80D, 80CCD (1B), and 24 (b).

However, each of these sections come with a maximum investment amount set by the government. Therefore, based on the tax rate of the individual - 5 percent, 20 percent and 30 percent (excluding cess of 4 percent) -- the maximum tax saved will be limited. Illustratively, on an investment of Rs 1 lakh, someone paying 20 percent tax will save Rs 20,000, while someone in the 30 percent bracket will save Rs 30,000 annually.