When you purchase an savings investment plan, you’re required to make regular premium payments to the service provider. These premiums may be monthly, quarterly, semi-annual, or annual payments. Irrespective of the schedule of payment, the premiums paid for purchasing a savings plan can offer you tax benefits.
According to section 80C of the Income Tax Act, 1961, the premiums paid for investing in a savings investment plan during a financial year can be claimed as a deduction from the total taxable income for that year, up to an upper limit of Rs. 1.5 lakhs . This, in turn, reduces the amount of tax you’ll need to pay, thereby bringing your tax liability down.