There are several tax benefit^ that you can avail when you purchase term insurance plans. The incentives that help you save more money overall on your tax outgo and ensure the protection of your spouse and children are hard to ignore. If you are looking for answers as to what are the various tax benefits^ of term insurance plans, here is an in-depth look at the same.
Term Insurance Tax Benefits^ under Specific Sections of the IT Act
As mentioned above, there are several term insurance tax benefits^ that you can avail of. Here are a few of them:
- Deductions under Section 80C- You can get deductions of up to ₹ 1.5 lakh under Section 80C. Do keep in mind that this section includes deductions on investments like PPF (Public Provident Fund), tax-saver FDs (fixed deposits), NSC (National Savings Certificate) and even repayment of home loan principal. You can aim for deductions on the term insurance premium paid every year for yourself and your family members under this section.
- Benefit under Section 10 (10D) - Whenever a family receives the policy holder’s death benefit or sum assured post his unfortunate demise, the amount received is exempt u/s 10(10D) subject to conditions provided therein.
Section 80D- Section 80D offers deduction of health insurance premiums paid every year for yourself, your spouse and children, up to ₹ 25,000. You can get deduction up to ₹ 50,000 if life assured is over 60 years of age. The same rule applies in case you are paying premiums for your parents. Deduction up to ₹ 5,000 is allowed on preventive medical check-up within the overall limit.
Apart from the tax benefits^, term insurance secures your family for the long haul along with helping you enjoy the benefits of considerably lower affordable premiums. Not only do you get annual tax benefits^ but the eventual death benefit will also be non-taxable subject to conditions under Income Tax Act. This works as major security for your family and gives you greater peace of mind at all times.
People like you also read ...
^ Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.W/II/0480/2019-20