What are Tax Benefits Offered by LIC Policy?
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LIC, or the Life Insurance Corporation of India, is one of the leading insurance providers in the country. Along with offering a wide range of policies, the insurer also presents a great deal of tax-saving options for the policyholders.
LIC of India is one of the country’s most trusted and prominent insurers, offering a range of life insurance plans. Along with a host of plans on offer, LIC also serves its policyholders with a range of options for tax exemption. Thus, numerous plans that LIC offers allow tax benefits under varied sections of the Income Tax Act of 1961. In this post, we will discuss and understand the various LIC saving schemes offered by the insurer in India.
What’s Inside
Tax Benefits Offered under LIC Policies
Here is a list of tax benefits offered under the different sections of LIC policies:
1. Section 80C :
Several LIC plans offer tax benefits under Section 80C of the Income Tax Act, 1961. As per this section, the LIC premium under 80C paid towards LIC policies is eligible for tax exemption. However, the policy should be in the name of the policy buyer, their spouse, parents, or children. Also, any payment made towards deferred annuity plans is eligible to receive tax benefits.
LIC New Jeevan Dhara and LIC Jeevan Akshaya are some LIC plans eligible for tax benefits under Section 80C.
2. Section 80D:
Section 80D of Income Tax offers policyholders the option to get tax exemption if the policy is purchased to secure the life of a disabled person. INR 50,000 is the minimum deduction allowed under this section, while the maximum tax exemption that can be availed under it is up to INR 1,00,000. One such LIC tax saver policy that offers such exemption is the LIC Jeevan Aadhar plan.
3. Section 10 (10D)
As per section 10(10D) of the Income Tax, tax -an individual can avail benefits if it is received as a death benefit or as a maturity benefit on a selected LIC plan. In this case, the maximum tax exemption can go up to INR 1,50,000.
4. Section 10(10A)
A policyholder can avail tax benefits if the person pays a premium towards pension or retirement plans under section 10(10A). LIC Jeevan Nidhi Annuity plans and LIC Jeevan Suraksha are some such plans which allow LIC tax exemption under section 10(10A) of the Income Tax.
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LIC Plans with Tax Benefits
Several LIC tax saving plans are available with tax benefits, as mentioned in the table below:
|
LIC Policy |
Tax Benefits |
| LIC Jeevan Umang |
Section 10(10D) of income tax offers many assured tax exemptions on death benefits, maturity benefits, and survival benefits, among others, which can be availed under the LIC Jeevan Umang Plan |
| LIC Jeevan Labh |
Under this plan, tax exemption is available on the premiums paid towards the LIC Jeevan Labh. Further, the maturity amount received at the end of the policy term is also exempted from tax under Section 80C of Income Tax |
| LIC New Jeevan Anand |
Section 10(10D) of the Income Tax Act offer tax benefits on both the premiums paid as well as the maturity amount or the death benefit of LIC New Jeevan Anand plan |
| LIC Jeevan Lakshya |
As per Section 80C, the insured can get tax exemptions on the premium paid towards LIC Jeevan Lakshya. Also, the maturity amount received is free from tax as per Section 80D |
Apart from the policies mentioned above, other plans of LIC come with tax benefits too. So, you can pick a plan depending on your requirement to reduce your tax liabilities.
To Conclude
From the above details, you can understand the various tax-saving options LIC offers using various LIC plans. These policies allow you to save your hard-earned money from tax liabilities. Hence, it is suggested to procure such tax-saving LIC plans to reduce your tax liabilities.
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DISCLAIMER
The content of this post is published for the general public’s interest and is meant for only information purposes, and is not conclusive. Readers are advised to research further and consult experts for detailed information on tax benefits.
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FAQs: Tax Benefits Offered by LIC Policy In India 2023
What is the LIC deduction in income tax?
LIC allows the maximum limit of INR 1.5 lakhs as an exemption under various sections, namely 80C, 80CC, and 80CCE. The exemption is also available if the premium of your policy is more than 20% of the actual sum assured.
Can I get an income tax exemption for my LIC premium?
Yes, you can get an exemption for the premiums paid for LIC policies under Section 80C. However, you can get the deductions only if you buy the policy for yourself, your children, or your spouse.
Is the LIC maturity amount taxable?
In most LIC plans, the LIC maturity amount is completely tax-exempt under Section 10(10D) unless the premium exceeds 10% (20% in the case of policies issued after April 1, 2003) of the sum assured.
Can I get an exemption under Section 10 for my LIC policy?
Section 10D allows tax exemption for the premiums paid for a LIC life insurance policy. In addition, if the premium paid on the policy is not more than 10% of the sum assured, the policyholder can enjoy a tax deduction on the maturity amount.
Can I get an 80C tax deduction for the LIC premium paid with or without GST?
Yes, 80C can be deducted from the LIC premium with or without GST, provided the overall limit available under Section 80C is INR 1.5 lakh.
How does the LIC Jeevan Labh premium calculator work?
LIC Jeevan Labh premium calculator works like any other premium calculator. All you need to do is enter details like the age, policy term, sum assured, the premium payment term, etc., to find the premium amount you need to pay.
Which LIC policy is best for tax benefits?
LIC offers many good policies that are best for tax benefits, such as LIC Jeevan Lakshya, LIC Jeevan Umang, LIC New Jeevan Anand, LIC Jeevan Labh, etc.
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