Tax savings
Here, in India, the investment in life insurance is
mainly driven by the tax-savings purpose rather than a genuine call for insuring
one's life. In most of the life insurance plans, a rebate of 20% is allowed on investment
under Section-88.
The rates of Income Tax applicable under the Finance
Act,1999 for the financial year 1999-2000 in case of an individual are as follows.
| TOTAL
INCOME( Rs) |
Rate |
Surcharge |
| Upto Rs 50,000 |
Nil |
- |
| Rs 50000- Rs 60000 |
10% |
Nil |
| Rs 60000- Rs 150000 |
20% |
10% |
| Rs 150000 and Above |
30% |
10% |
|