Tax Saving Life Insurance Plans

How to save income tax with Life Insurance Plans?

Under the Income Tax Act (1961), you can save tax on your hard earned money by using our innovative Life Insurance products and solutions. You can get tax advantages at different stages of the policy.

• Stage 1: Entry Advantage – You receive tax benefits on your premium payments under Section 80C (life insurance), 80CCC (pension) and Section 80D (health)
• Stage 2: Earnings Advantage – The growth of your money under the life insurance policy is not taxable
• Stage 3: Exclusive Switching Advantage – You can switch between equty, debt and balanced funds anytime and these switches are not taxable
• Stage 4: Exit Advantage – You receive a tax free Maturity Benefit^# under Section 10(10D)

^#Maturity Benefit is the amount you receive when your policy ends

Tax benefits offered under the Income Tax Act, 1961:

• Section 80C:

  You can claim deduction from your taxable income on account of premium paid towards life insurance for self, spouse or children. Deduction of 10% of the sum assured will be allowed up to a maximum of  1.5 lac. For example, assume that you have a plan with an annual premium of 1.5 lakh and a Sum Assured of  30 lakh. Here, you can claim tax benefits on the 1.5 lakh paid as premiums (as 10% of 30 lakh comes to 3 Lakh) which is more than the maximum limit.
  

• Section 10(10D):

  The returns earned from Life Insurance policies are tax-free subject to conditions of Section 10(10D) of the Income Tax Act (1961).

Details of plans eligible for tax benefits under Section 80C and 10(10D):

• Section 80CCC:

  You can get tax benefits on premium paid up to 1,50,000/- towards pension/retirement policies. However, if you surrender the plan, the pension/annuity received will be taxed as per the existing tax laws.

• Section 10(10A):

  1/3rd of the payment that you receive at the time of retirement is also tax free. This is known as commutation.

Please refer the table below to view the details of plans eligible under Section 80CCC and 10(10A)

• Section 80D:

  You can get tax benefits on premiums paid in any mode, other than cash towards health insurance policies taken for yourself, your spouse, your dependent children and your parents. The maximum tax benefits under this Section are as follows:
  • Tax benefit on premium paid up to 25,000 for yourself, your spouse or your children (Limit is 30,000 if the age of insured* is 60 years old or more)
  • There is an additional tax benefit of 25,000 for health insurance premium paid for covering parents (Limit is 30,000 if the age of insured* is 60 years or more).

*Insured is the person on whose health, insurance is taken.

Please refer the table below to view the details of plans eligible under 80D

• Section 80CCE:

  Under this section, the overall limit of deduction from taxable income to get tax benefits under Sections 80C, 80CCC and 80CCD(1) is 1,50,000/-.

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Please note: The tax write-up above is for general understanding and reference. You will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time. ICICI Prudential Life Insurance Company Limited expressly disclaims any liability to any person, if tax benefits stated above are denied to the customer. Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values & 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. Advt-