Tax Saving Life Insurance Plans

Life insurance policies are useful tax planning tools, because the policy holder is eligible for tax benefits under the Income Tax Act 1961 (Act). Though there are multiple modes for saving tax, life insurance is one of the most effective tax planning instrument. With ICICI Prudential life insurance plans, individuals can not only save tax but also look at achieving their long term goals along with life cover.

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 advantage at different stages of your life insurance policy.

  • Stage 1: Entry Advantage – You receive tax benefits on your premium payments as per conditions under Section 80C (life insurance), 80CCC (pension) and Section 80D (health)
  • Stage 2: Earnings Advantage – The growth on your money under insurance is not taxable
  • Stage 3: Exclusive Switching Advantage – Debt-Equity Switches** are not taxable
  • Stage 4: Exit Advantage – You also receive a tax free Maturity Benefit# under life insurance subject to conditions under Section 10(10D)

**Switch is an option to move your allocated money between equity and debt funds
#
Maturity Benefit is the amount you receive when your policy ends

Various Sections under the Income Tax Act, 1961 provide tax benefits on life insurance policies. Here are some of the key tax benefits offered:

  • Section 80C:

    Under this Section, one can claim deduction from his/her taxable income on account of premium paid towards life insurance for self, spouse or children. However, deduction will be allowed to the extent of 10% of sum assured up to a maximum of ₹1.5 lac. For example, assume that you have a plan with an annual premium of Rs. 1.5 lakh and a Sum Assured of ₹30 lakh. Here, you can only 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 by you from Life Insurance policies are tax-free subject to conditions of Section 10(10D).

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

Sections Product Category Available Online
Section 80C & Section 10(10D)
ICICI Pru Elite Wealth II ULIP Plan Yes - Buy now
ICICI Pru Elite Life II ULIP Plan Yes - Buy now
ICICI Pru Wealth Builder II ULIP Plan Yes - Buy now
ICICI Pru Savings Suraksha Traditional Savings Plan Yes - Buy now
ICICI Pru Cash Advantage Money Back Plan Yes - Buy now
ICICI Pru Guaranteed Wealth Protector ULIP Plan Yes - Buy now
ICICI Pru SmartLife ULIP Plan Yes - Buy now
ICICI Pru Sarv Jana Suraksha Rural Plan No - Explore
Section 80C, 80D
ICICI Pru iProtect Smart Term Plan Yes - Buy now
  • 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)

Sections Product Category Available Online
Section 80CCC & Section10(10A) ICICI Pru Easy Retirement Retirement Plan Yes - Buy now
  • 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

Sections Product Category Available Online
Section 80D ICICI Pru iProtect Smart Term Plan with Health option Yes - Buy now
  • 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/-.

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. W/II/127/2015-16.

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