Tax Saving Life Insurance Plans

The importance of tax saving

What does one understand by the term, tax savings? The income that an individual earns every year is subject to the Income Tax laws governing that country. The Income Tax rates are not the same for all. The rates varies basis on different income levels.. So the total income tax an individual needs to pay depends upon the annual income he or she has earned in that given year. But, there are many ways by which one can save incometax.
So the question arises that how to save income tax? To extract maximum tax benefits, you need to invest your earnings wisely in different insurance plans. This is where your investments come into play, as a lot of investment plans come with several benefits. With the help of tax deduction, a break granted by the government, one can save tax on premium paid. The maturity proceeds of life insurance product is tax free as well. You could look at long term objectives like investing in a pension plan for a life after retirement or a life cover to secure your family's future. There are a range of tax saving plans available for individuals to gain tax benefits under various sections. This is why it is very important to carry out an extensive research and know about the different products available.

Tax saving through Life Insurance Products

To save tax, Life Insurance products play a important role. Under the Income Tax Act 1961, by investing in a life insurance plan, you are allowed to claim deduction on the premiums that you pay when calculating taxable income (subject to conditions of Income Tax Act, 1961). This means, the insurance premiums which you pay helps in reducing your tax outflow. Further subject to conditions, maturity proceed from Life Insurance comes under exempted incomes. This means, no tax to be payable on any benefits received on maturity or on death . Hence Life Insurance Scheme can help you avail dual tax benefits. Also, you are investing in a Life.
You can also get Tax benefits on Health Insurance and production product. This helps in reducing the computable tax base, thus resulting in reducing the net tax liability.

Tax Planning for Individuals

Let's take a look at some of the benefits which an individual person can benefit from tax saving.An Individual/salaried can avail following tax benefits on premium paid by way of deductions from taxable income

  • Section 80C - Premium paid on Life Insurance policies : deduction upto Rs.1,00,000 Premium paid on pure term, endowment and Ulip product eligible for 80C benefit
  • Section 80CCC- Premium paid on pension policies :deduction upto Rs.1,00,000 deduction is within Rs.1,00,000 limit of Section 80C and 80CCD(1)
  • Section 80D- Premium paid on health insurance policies :deduction upto Rs. 35,000/- Rs.15,000 deduction is allowed for self , spouse and dependent children: Additional Rs 15,000 for parents or Rs.20,000 for parents above 60 years of age.
  • Maturity proceeds from Life Insurance policies are exempt u/s 10(10D) subject to specified conditions

So go ahead, secure your future by investing in a Life Insurance Policy that reaps in great benefits along with making sure that your hard earned money stays with you.

Sections Descriptions Product Product UIN Category Available Online
80C (Tax savings on premium paid)
10 (10D) (Tax free Maturity/) (Non Linked)
Deduction benefit upto Rs. 1 Lac .80C

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Disclaimers: IN ULIPs, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICY HOLDER © 2012, ICICI Prudential Life Insurance Co. Ltd. Registered Address: - ICICI Pru Life Towers, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Reg No: - 105 Insurance is the subject matter of the solicitation.For more details on the risk factors, term and conditions please read sales brochure carefully before concluding the sale.Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values and the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns. Investments are subject to market risk. Tax laws are subject to amendments from time to time. Advt.No.W/II/1540/2011-12