Its that time of the year when both the salaried and the business class run around for investments vehicles purely for the purpose of income tax rebates/deductions. The avenues available are many – to mention a few - PPF, IDBI and ICICI tax relief bonds and of course the ELSS of many mutual funds.

All the above allow tax rebates under section 88 of the income tax act allowing you a rebate of 20% of the invested amount, the maximum permissible investment amount being Rs 60,000 per financial year and an additional Rs 20,000 in infrastructure bonds, thereby totaling to Rs 80,000.

Whereas all the above products are excellent and serve its purpose, there still lies another savings product which apart from providing benefit of tax saving also provides you with a life cover along with it additional benefits of critical illness, surgical assistance et cetera.

The advantage of saving through the life insurance route is that apart from the tax rebates it also provides a peace of mind, protection to life and lastly the proceeds both on maturity and death claim is completely free from income tax. The only other instrument that provides the same (tax free maturity amount) is the PPF and all other instruments are taxed on maturity.

Considering the above advantages it makes prudent sense to look into life insurance apart from protection but also as a tax saving instrument as well under the section 88.

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