Tax Benefits Offered in LIC Policies
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Life Insurance Corporation or LIC is one of the leading providers of life insurance plans in India. Offering a bunch of life insurance plans, LIC provides policyholders with the option of investing in a desired life insurance plan. In addition to being a good investment option, the plans offered by LIC are also a great way to save on income tax. A number of plans offered by LIC are exempted from tax liability as mentioned under the different sections of the Income Tax Act of 1961. So, if you too want to save tax and avail the other benefits of LIC life insurance plans, then read on to understand the different tax benefits offered under LIC policy.
Tax Benefits Offered in LIC Policies
Here is a list of tax benefits offered under the different sections of LIC policies:
1. Section 80C
As per section 80C of the Income Tax Act, 1961, there are tax benefits offered under different LIC plans. Under this section, the premium paid toward any life insurance policy is eligible for tax benefits if the policy is issued in the name of a spouse, child, or parent. In addition, contributions made towards deferred annuity plans are also eligible for tax deductions. Some of the LIC plans that are eligible for tax deductions under Section 80C such as LIC New Jeevan Dhara, LIC Jeevan Akshaya, and many more.
2. Section 80D
Under section 80D of the Income Tax Act of 1961, policyholders are exempted from tax liability if they have a policy that is dedicated to the care of a handicapped person. The maximum deduction allowed under this is Rs. 50,000 and if the person is disabled, then the maximum deduction goes up to Rs. 1,00,000. The LIC Jeevan Aadhar plan comes under this section.
3. Section 10 (10D)
Section 10(10D) of the Income Tax Act allows tax benefits if an individual receives death benefits or maturity benefits on a selected LIC plan. However, it is important to note that the maximum tax benefits offered go up to Rs. 1,50,000.
4. Section 10(10A)
Section 10(10A) provides tax benefits if any contribution is paid towards pension plans. The LIC plans that are exempted from tax deductions as per Section 10(10A) of the Income Tax Act are LIC Jeevan Nidhi Annuity plans and LIC Jeevan Suraksha.
LIC Plans Offering Tax Benefits
There are a number of LIC plans that offer tax benefits. Some of the LIC plans which can help you get tax benefits have been elaborated below:
- LIC Jeevan Umang: As per Section 10(10D), there are assured tax benefits on the LIC Jeevan Umang Plan. Tax benefits are offered on death amount, maturity amount as well as survival benefit amount.
- LIC Jeevan Labh: The premium paid towards LIC Jeevan Labh along with the maturity amount received out of this plan is exempted from tax deductions according to Section 80C of the Income Tax Act of 1961.
- LIC New Jeevan Anand: The LIC New Jeevan Anand offers tax benefits on the premium paid as well as the claim amount which includes the maturity amount and death benefit amount. This is specified under Section 10(10D) of the Income Tax Act.
- LIC Jeevan Lakshya: As per Section 80C, the premium paid towards LIC Jeevan Lakshya is tax-free and the maturity amount received is free from tax deductions according to Section 80D.
Apart from these, there are a few other plans offered by LIC that provide tax benefits. So, pick a plan that qualifies for tax deductions and reduces your tax liability.
Take Away
Thus, with LIC tax-saving plans, you can save your hard-earned money from tax liabilities. It is thus suggested that such tax-saving LIC plans should be purchased by all those who have tax liabilities.
Also read: HDFC Life Premium Calculation: Meaning, Benefits & Process
