Taxation related

1. What are the Tax benefits available in a Life Insurance Policy?+ -

Under Section 80C of Income Tax Act, 1961

Annual Premium paid during the financial year towards a life insurance policy is allowed as deduction from the total income. This deduction is available to Individuals and HUFs only. The cumulative deduction available under section 80C, section 80CCC and section 80CCD(1) of the Income Tax Act is restricted to INR 1,50,000/-.
In case where the annual premium on a life insurance policy is exceeding 10% of the actual capital sum assured, the deduction should be available only to the extent of 10% of such premium amount (which is further restricted to INR 1,50,000 as stated in the above paragraph).
Under Section 80D of the Income Tax Act, 1961

While calculating the total income of an assesse who is an individual or HUF, amount paid during the financial year out of income chargeable to tax, by any mode (other than cash), for Critical illness rider is deductible from such total income. The amount is subject to a maximum amount of INR 25,000/-for self and family and additional INR 25,000/- for parents (INR 30,000/- if any of the parents is senior citizen).
Under Section 10(10D) of the Income Tax Act, 1961

Maturity payments/death benefits of the policy are exempted from payment of tax under Section 10(10D) of the Income Tax Act, 1961.
As per section 10(10D) any sum received under a life insurance policy (other than sum received under section 80DD(3) or section 80DDA(3) or under a Keyman Insurance Policy) will be exempt, provided the annual premium payable under any of the years during the term of the policy does not exceed 10% of the actual capital sum assured. Death benefits are tax-free.

2. What are the Tax benefits available on pension plans?+ -

Contributions by an individual to pension plans is allowed as deduction from the income chargeable to tax, subject to a maximum of INR 1,50,000/- in a given financial year.

3. Are there any Tax benefits on the premium I pay on the policy for my family?+ -

Yes, premium paid by you for the Life Insurance policy of your family i.e spouse or child does qualify for deduction under Section 80C of the Income Tax Act, 1961.

4. Is there any Service Tax applicable on the premium paid for insurance policies?+ -

No Service Tax is applicable at present. All premiums and charges are subject to Goods and Services Tax (GST) with effect from July 1, 2017.

5. Is there any Tax benefit on the advance premium that is paid?+ -

You can claim tax benefit on the advance premium (i.e. the premium that is paid before the premium due date) paid in the year of payment.
The upper limit for section 80C, 80CCC and 80CCD (1) under the Income Tax Act, 1961, is INR 1,50,000/-.
Note: The above mentioned tax benefits are however subject to changes in the tax laws. For more clarification, please get in touch with your tax consultant.

Taxation related

1. What are the Tax benefits available in a Life Insurance Policy?+ -

2. What are the Tax benefits available on pension plans?+ -

3. Are there any Tax benefits on the premium I pay on the policy for my family?+ -

4. Is there any Service Tax applicable on the premium paid for insurance policies?+ -

5. Is there any Tax benefit on the advance premium that is paid?+ -

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