Life Insurance Premium Tax Benefit: If you are planning to invest in any policy of Life Insurance Corporation of India ie LIC, then you must read this news. With a life insurance policy, you get tax exemption. There are some life insurance plans in which along with investing, you help in family security and tax savings.
Relief in tax savings
Some investors pay premiums for life insurance policies on an annual basis. Some investors believe in paying the premium as a lump sum. If you also want to buy a single premium life insurance policy i.e. a policy that pays a lump sum premium, then you should know some rules related to tax saving.
Will get exemption in income tax
Let us tell you that under Section 80-C of the Income Tax Act, a single premium life insurance policy also gets tax exemption on premium up to Rs 1.5 lakh. Not only this, the amount received on maturity (including bonus) of a single premium life insurance policy issued after April 1, 2012 is also tax free. It is important that your annual premium should not exceed 10% of the sum assured amount of your policy.
so much tax will be deducted
If in any case the annual premium of a single premium life insurance policy is more than 10%, then they have to pay tax on the maturity amount of the policy. The concerned insurance company can deduct tax at the rate of 5 percent on the maturity amount of that policy under section 194-DA of Income Tax.
they will not get discount
No tax exemption will be available on life insurance policy under Section 80-C of Income Tax. However, in the new regime, the amount received on the maturity of the policy will be given the benefit of tax exemption under section 10(10-D) of Income Tax. If you have a sum assured of Rs 18 lakh and the annual premium is going up to Rs 2 lakh, then there will be no tax exemption on this.
Know these rules too
If a person has zero annual income, then he gets tax exemption under 80-C on the premium of the life insurance policy. Even though he has opted for the new tax regime. If you are paying the premium of a single premium insurance policy by 10% more than the sum assured, then you will not get tax exemption.
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