Life Insurance policies give you an additional advantage of tax benefit. As your income increases, the tax bracket also widens. The most apt method to save your hard earned rupee is through investment in insurance policies.
With most insurance policies, the premium you pay is eligible for tax benefits.
Under Existing Income Tax Laws, contribution towards life insurance policy is allowed
as deduction in income, thereby decreasing tax liability. It means that you not only provide
financial security for your loved ones in the unfortunate event of
your demise, but also reap the benefits of additional income from tax savings through
premium contribution in unit linked insurance plan.
Any profit earned from Unit linked insurance plan
also provides tax benefits to the payee. Another advantage of life insurance is that the lump sum benefit payable on death is tax free.
Life insurance is therefore your greatest ally to help you save your hard earned money from the burden of tax.
4 tax Benefits through Life Insurance
- For Individuals and HUF –An individual or HUF paying life insurance premium can avail deductions on taxable income up to Rs. 100,000 under existing income tax laws subject to applicable conditions.
- On payment of any bonus – Any amount of insurance benefit received as a lump sum payment from life insurance policy is considered as a non-taxable amount under existing income tax laws subject to applicable conditions.
- Premium payment on behalf of spouse – Income Tax deduction is also available on life insurance premiums paid on behalf of your spouse
- On maturity of policy – Life insurance proceeds are not taxable for the deceased’s family.
Income Tax benefits under Income Tax Laws are subject to amendments and interpretation from time to time. Kindly consult a tax expert. Conditions apply.