How to Use an Income Tax Calculator to Optimise Your Insurance Benefits?

Everyone today is concerned about their finances and meeting long-term goals. Thus, it is crucial to find the right balance between the benefits of buying an insurance policy and its tax liabilities. If you often find yourself in a situation where finding the insurance benefits becomes difficult, then worry not. An income tax calculator is the right tool for you to explore.

Curious about how this online tool can bring relief and confidence by helping you optimise your insurance benefits? This blog provides details regarding how to calculate income tax online so that you can make the right financial decisions based on your calculations.

What is an Income Tax Calculator?

An income tax calculator refers to the online mechanism that calculates the total amount of payable tax to the government, deducted according to the tax slab within an individual's income. To know the liability, you have to insert the following details within the calculator:

1. Your Age

2. Income

3. Investment

4. Deductions etc

By strategically using the income tax online calculator, you can access different scenarios, explore various insurance options, and make informed financial decisions without hiring a professional tax consultant. This sense of control and empowerment is invaluable in managing your financial future.

Step-by-Step Guide on How to Calculate Income Tax Online

To use the income tax online calculator for maximising your financial goals, here's a step-by-step guide that you need to explore:

1. First, you need to choose the Assessment Year that you are looking forward to calculating the taxes.

2. Next, select your age.

3. Enter your annual income including all the other income sources like rental income and annual interest rate on home loans.

4. Enter details regarding all your deductions under various sections like Section 87A, 80C, 80CCD (1B), 80D, 80G, 80E, 80TTA, 80TTB, and 80GG.

5. Next, you will have to add all the details regarding your HRA exemptions, like basic salary, DA, HRA, and total rent paid per annum.

6. Finally, you need to select whether you live in a metro city or not and hit the proceed button to calculate the tax liability.

In the above steps, computing and determining your tax liability is easy and instant, regardless of your tax regime, through the income tax online calculator. It is an extremely simple and user-friendly tool, thus laying the power of financial planning in your hands.

Benefits of Income Tax Calculator

An income tax calculator allows you to play around with several insurance scenarios for a deal that is most viable economically. Here's how you can use this online tool to maximise your benefits accrued from insurance:

1. Identify the Eligible Deductions

With an online income tax calculator, you can easily and effortlessly find eligible deductions. It may include deductions for health insurance, life insurance, and more. Knowing the details regarding the deductions to which you are entitled can help you make an informed decision about buying insurance coverage.

2. Evalue the Premium Impact

The income tax calculator allows you to find the impact of insurance premiums on your overall tax liability. You can input numerous variables like coverage amount and premiums to find how different insurance plans affect your tax liabilities. Thus, using the online calculator, you can find the right balance between your insurance needs and tax obligations.

3. Maximise Retirement Contributions

Out of all the stages in life, retirement is one of the most vital. It is the age when you can have all the freedom to live your life as you wish and do things that give pleasure. No one wants to stress about managing finances in these crucial moments. So, saving while you are working is very important for a relaxed and happy retirement.

Other than protecting you and your dependents from uncertainties, an insurance policy also acts as a means of saving for the future. The contributions that go toward funding retirement plans—like a 401(k) or IRA—are extremely tax-efficient. Most of the contributions are even tax-deductible, reducing your overall taxable income.

4. Find Optimal Insurance Purchasing Time

Using an income tax online calculator, you can determine the optimal time for purchasing or adjusting your insurance coverage. This tool can help you make more strategic choices that align with your overall long-term financial objectives.

Explore the Best Income Tax Calculator!

Now, after knowing how to calculate income tax online and how it can help you maximise your insurance benefits, make sure to update the tax calculator with new income as well as expense details along with any other info related to insurance. This will allow you to help identify the right financial choices.

So, whether you want to optimise your health insurance coverage or understand the tax implications of a specific policy, use the Canara HSBC Life Insurance income tax calculator. Its online tax calculator is smooth and user-friendly, allowing you to easily search for your insurance benefits at the click of a call. Their insurance policies are designed to help you enhance your financial stability, reduce your tax burden, and achieve your long-term financial goals. 

Plan for yourself and your family & use the income tax online calculator to make better insurance decisions.