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Term plan tax benefits

Are you looking out for ways to save tax this financial year? Learn how life insurance can help you to save tax while protecting your family's financial future.<br>

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Term plan tax benefits

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  1. Term plan tax benefits

  2. How life insurance save tax ? • Both your protection and term plan tax benefits are provided by life insurance. This article investigates the consequences of tax savings. Let’s first examine how your taxable income is determined in relation to the tax-saving investments you make in order to comprehend how you might save tax on life insurance. • Let's say Rs 5,00,000 is the taxable share of your income. According to your income category, this means that your tax obligation for the year would be calculated at Rs 5,00,000. So, for example, if a particular investment option is reported to provide a tax benefit of up to Rs 50,000 annually, this Rs 50,000 is subtracted from your taxable income, which is Rs 5,00,000. Your tax obligation would therefore be based on Rs. 4,50,000. • However, you must be able to demonstrate that you are using your money to pay the premiums for these options. Do keep in mind that you cannot claim life insurance tax benefits on the same plans in a given year with your employed spouse.

  3. A few benefits on tax benefits on life insurance : • If the insurance was obtained after April 1, 2012, and the premium paid does not exceed 10% of the total assured under the policy, you may be eligible for a deduction under Section 80C. The premium cannot exceed 20% of the sum guaranteed if the insurance was purchased before April 1, 2012. • If the premium paid does not exceed 15% of the sum assured, you may be entitled to claim a Section 80C deduction if you acquired a life insurance policy for a disabled family member or if the condition applies to you. However, the handicap must be registered under Section 80U of the Income Tax (IT) Act, and the terminal illness must be listed under Section 80DDB. • If the premium does not exceed 10% of the sum assured, the maturity amount of a life insurance policy is not subject to Section 10D taxation. If the premium is more than 10% of the amount assured, the exemption is not applicable. • Policies whose maturity amount exceeds Rs. 1,00,000 are subject to TDS, which may be reclaimed by filing an ITR for the following year.

  4. Thank You

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