Well, it may not be, but the insurance companies will have to trigger other dominant motives should such a situation arise. The present position only highlights the importance enjoyed by income tax in the selling of life insurance. The obligation to pay income tax by the employee and its compulsory deduction at source coupled with the penalties that can be imposed for the violation of these mandatory provisions. A rupee saved from tax equals two rupees earned , is a famous dictum. It supports the belief that it is better to save rather than pay tax.
Tax planning is an honourable and legitimate way of saving money.
It is something permitted by law. It is not tax evading. One can build up large assets through small savings effected through tax planning. Earlier a citizen would get into the maze of tax laws and be totally lost. There was a plethora of laws relating to Income Tax, Estate Duty, Wealth Tax, Gift Tax, Married Women s Property Act.