Premiums paid for Life Insurance Plans
- Category of Assessees eligible for Deduction:
- Individual
- Hindu Undivided Family assessee
- Eligible Payments: Premiums paid or deposited in the Financial Year by assessee to effect or to keep in force insurance on the life of following persons:
- In the case of Individual – Self, spouse and children
- In the case of HUF - Any member of HUF (incl. Karta)
- 20% limit: If the amount of premium paid in a Financial Year for a policy is in excess of 20% of the actual Capital Sum Assured, then deductions will be allowed only for premiums upto 20% of the Sum Assured.
- If the insurance contract is terminated in case of single premium insurance policy within 2 years from the date of commencement of insurance or in other cases before premiums have been paid for 2 years, tax deduction allowed earlier would become taxable as income.
Premium paid for Annuity Plans
- Premium paid during Financial Year for deferred Annuity Plan or Government notified annuity Plan is also eligible for tax deduction under Section 80C.
- Premium can be paid for deferred Annuity Plan on the life of self, spouse and children.
Limit on Amount of Deduction
- Deduction under Section 80C is available upto a maximum of Rs.100,000, the overall limit provided under the Income-tax Act for payments/deposits specified under Section 80C, 80CCC and 80CCD (contribution to pension scheme of Central Government) in aggregate.
"Please note that tax laws and benefits under the said laws are subject to change. Please consult your tax advisor for the latest tax benefits on Life Insurance plans."