ITR Filing: These tax benefits are available on life insurance policies

Section 80C Income tax is one of the most popular classes available. If a policyholder has paid the premium life insurance To insure his life or the life of the spouse or any child of the assessee and in case of HUF, such premiums paid are eligible for benefit under section 80C.

However, it needs to be noted that, these life insurance policies are issued on or before 31st day of March 2012, and they will be eligible for deduction only to the extent of 20%.

Actual Capital Sum Assured or actual premium paid, whichever is less. In case, if the insurance policy is issued on or after 1st April 2012, it will be eligible for deduction only to the extent of 10% of the actual capital sum assured or the actual premium paid, whichever is less.

In case, if the life insurance policy is struck on or after the 1st day of April, 2013 on the life of a disabled person referred to in section 80U, or suffering from illness or disease specified under section 80DDB – the premium is to be paid of the actual capital sum assured. will be eligible for tax exemption to the extent of 15% or the actual premium paid, whichever is lower.

In addition, income tax exemption is given on maturity or death claims under life insurance policies under section 10(10D).

According to Clear, an income tax service provider reports, when the premium paid on a policy exceeds 10% of Sum Assured for policies issued after 1st April 2012 and 20% of Sum Assured for policies issued before 1st April 2012 Not exceeding – Any amount received on maturity of life insurance policy or amount received by way of bonus is fully exempt from income tax u/s 10(10D). It also includes policies taken after 1st April 2013 on the life of a person with disability or disease specified under sections 80U and 80DDB respectively, where the amount received on maturity is tax-free provided the premium paid exceeds 15% No Sum Assured.

The report also states that taxation, where the premium paid exceeds 10% of the sum insured – any money received from a life insurance policy, where the premium exceeds 10% or 20% of the sum insured, as the case may be May be, is fully taxable.

Also, a policyholder can claim his TDS on these life insurance policies by filing ITR. If a policyholder receives more than 1 lakh on their insurance policies and these are not covered under section 10(10D), then TDS of 1% will be deducted by the insurer before making the payment to the policyholder. The same deduction applies to bonus payments. Also, if the amount received on insurance policies is less than 1 lakh, then no TDS will be deducted but the amount will be fully taxable.

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