Tax Benefits in Insurance

1.  INCOME TAX ACT Section 10(10D)

Any amount received or earned under a life insurance policy qualifies for complete tax exemption with no upper limit. A sum received could be - 

  • Sum allocated by way of bonus
  • Survival benefit
  • Maturity benefit
  • Surrender value
  • Death benefit
  • This deduction also applies to proceeds and gains from a ULIP.

2. INCOME TAX ACT Section 80C

Under section 80C, a deduction of Rs 1,50,000 can be claimed from your total income. In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income through section 80C. This deduction is allowed to an Individual or a HUF.

The maximum amount that can be claimed as deduction under section 80C is Rs 1,50,000 as per current income tax laws. Section 80C lists several investment options, including premium paid for a life insurance policy as specified, as eligible avenues for tax benefit. This means that investment, in aggregate, up to Rs 1.5 lakh in one or more of these investment options can be claimed as deduction from taxable income.

Options -

2.  Life Insurance Premium
3.  Public Provident Fund
4.  Employee Provident Fund
5.  Tuition fee of children
6.  Repayment of Home loan
7.  National Savings Certificate
8.  5 year Fixed Deposit

Last modified: Tuesday, 5 Mar 2019, 17:17