All that you want to know about tax saving when buying a Life Insurance Policy.

Life insurance also offers tax benefits to the policyholder, get answers to the most common questions about taxation savings with life insurance plans

1. Are there any tax benefits on life insurance premiums that I pay?

Yes. Life insurance products offers tax benefits as per prevailing tax laws. Deduction is available under Section 80C of Income Tax Act, 1961 for the premium paid on life insurance policies for self, spouse, children or any member of HUF, with a maximum deduction allowed of Rs. 1.5 lakhs, from the the gross total income subject to fulfilment of certain conditions speficied in section 10(10D). Rs. 1.5 lakhs is the combined maximum amount that can be exempted from taxation under Section 80C, 80CCC and 80CCD (1).

2. After the maturity of my policies, will the maturity proceeds be taxable?

Under section 10 (10D) of Income Tax Act, 1961 the policy proceeds received against life insurance policies, like ULIPs or endowment plans, are exempted from income tax under this section subject to fulfilling prescribed conditions therein.

3. I pay the premium for a policy where the life assured is my spouse/child, can I claim tax benefits?

Life insurance premium paid by you for your spouse/child's policy qualifies for a deduction under Section 80C of the Income Tax Act, 1961. However, remember that Rs. 1.5 lakh is the combined maximum amount that can be exempted from taxation under Section 80C, 80CC and 80CCE(1).

4. If I stop paying premiums on my life insurance or pension policies, can I claim tax benefits?

If you stop premium payments of your policy, it amounts to discontinuation of the policy. The tax benefits is in accordane to point 2 above.

5. Under which section does Term insurance offer tax benefits?

Term Insurance is a life insurance plan and thus it qualifies for taxation benefits u/s 80C of Income Tax Act, 1961 (for premiums paid) and u/s 10 (10D) of Income Tax Act, 1961 (for maturity proceeds).

6. Under which sections of Income Tax can I claim tax advantages of life insurance?

Section 80C of Income Tax Act, 1961 provides for tax deduction of life insurance premiums. Section 10 (10D) of Income Tax Act, 1961 provides for tax benefits of life insurance on maturity proceeds.

Section of Income Tax Act, 1961

Taxation Benefits On

Benefits

80 C

Premium paid towards life insurance for self, spouse, children or any member of HUF

Maximum deduction allowed is Rs. 1,50,000.

Rs. 1.5 lakhs is the combined maximum amount that can be exempted from taxation under Section 80C, 80CC and 80CCE.

subject to fulfilment of certain conditions speficied in section 10(10D).

10 (10D)

Policy proceeds received against life insurance policies, like ULIPs or endowment plans

Maturity benefits are tax free in the hands of policyholders at any point of time during the policy term; subject to fulfilment of certain conditions speficied in section 10(10D).

7. Which of the Max Life insurance plans can get me tax advantages of life insurance policies?

One of the many benefits of life insurance is tax savings. Max Life offers several insurance plans that offer tax savings. Click to get quotes or to buy now. Here are some popular plans:

Product

Offers

Available Online

Max Life Online Term Plan Plus - Basic Life Cover

Life Cover

Yes, Buy Now

Max Life Online Term Plan Plus - Life Cover + Monthly Income

Sum Assured plus Level Monthly Income

Yes, Buy Now

Max Life Online Term Plan Plus - Life Cover + Increasing Monthly Income

Sum Assured Plus Increasing Monthly Income Death

Yes, Buy Now

Max Life Super Term Plan

Sum Assured option to cope with the rising inflation

No, Get Quote

Max Life - Premium Return Protection Plan

Premium return policy with comprehensive life cover

No, Get Quote

Shiksha Plus Super

ULIP with life insurance coverage

No, Get Quote

Max Life offers a wide range of life insurance plans for varying financial planning and tax planning needs. Read more to zero-in on the plan that best suits your needs.

The information in this article has been collected through secondary research and Max Life Insurance Company Limited is not responsible for the accuracy of the content. Please consult your tax advisor for specific advice.


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Max Life Online Term Plan Plus

An affordable term insurance plan with three death benefit options