INCOME TAX AND TAX BENEFITS FROM LIC
You can save tax for all the investments made in LIC of India. Some important income tax benefits available under various plans of life insurance are given below:
1) Deduction allowable from Income for payment of Life Insurance Premium (Sec. 80C)
- Life Insurance premia paid in order to effect or to keep in force an insurance on the life of the assessee or on the life of the spouse or any child of assessee & in the case of HUF, premium paid on the life of any member thereof, deduction allowed upto 20% of capital sum assured during any financial year.
- Contribution to deferred annuity Plans in order to effect or to keep in force a contract for deferred annuity, on his own life or the life of his spouse or any child of such individual, provided such contract does not contain a provision to exercise an option by the insured to receive a cash payment in lieu of the payment of annuity is eligible for deduction.
- Contribution to Pension/Annuity Plans - Jeevan Akshay - VI
2) Deduction under section 80D
- Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of assessee or his family (i.e. Spouse & children)
- Additional deduction upto Rs.15,000/- if an amount is paid to keep in force an insurance
on health of parents. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid
to keep in force an insurance on health of any member of that HUF
Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in force an insurance on the health of any person specified therein who is a senior citizen, then the deduction available will be upto Rs.20,000/-. provided that such insurance is in accordance with the scheme framed by
a) the General Insurance Corporation of India as approved by the Central Government in this behalf or;
b) Any other insurer and approved by the Insurance Regulatory and Development Authority.
Premiums paid towards most traditional LIC plans are eligible for Tax rebate under Section 80C each year upto Rs.1,50,000. The Maturity/ Death claim paid under Jeevan Anand is 100% Tax-free under Section 10(10d)