Insurance policies

RTI Statement: These tax benefits are available on life insurance policies

Tax Return Filing: The ITR filing deadline for the 2022-23 tax year is approaching. Notably, the government does not plan to extend the ITR filing deadline from July 31. Therefore, it is important to ensure that you file your ITR on time to avoid penalties. To encourage savings and investment by taxpayers, the IT department provides various deductions from taxable income. A taxpayer must give information about his income from other sources in the ITR. It also concerns investments within the framework of life insurance contracts. That said, if you are filing an ITR claim, take note of these tax benefits as part of your insurance policies.

Section 80C is one of the most popular sections available in income tax. If a policyholder has paid a premium on life insurance to insure his life or on the life of the spouse or any child of the assessee and in the case of HUF, such premiums paid are eligible for benefits under section 80C.

However, it should be noted that these life insurance policies are issued no later than March 31, 2012 and will only be eligible for a deduction to the extent of 20%

the actual sum insured or the actual premium paid, whichever is lower. In the event, if the insurance policy is issued on or after April 1, 2012, it will only be eligible for deduction to the extent of 10% of the actual sum insured or the actual premium paid, whichever is the greater. lower.

In the event that, if the life insurance policy is issued on or after April 1, 2013, on the life of a person who is disabled within the meaning of section 80U, or suffers from an illness or condition within the meaning of Section 80DDB, the premium paid will be eligible for a tax exemption of up to 15% of the actual sum insured or the actual premium paid, whichever is lower.

In addition, exemption from income tax is granted on claims on maturity or death under life insurance policies under Article 10(10D).

According to Clear, a tax service provider, reports, when the premium paid on the policy does not exceed 10% of the sum assured for policies issued after April 1, 2012 and 20% of the sum assured for policies issued before April 1, 2012. April 2012 – any amount received on maturity of a life insurance policy or any amount received as a bonus is fully exempt from income tax under section 10(10D). Also covered here are policies taken out after April 1, 2013, on the life of a person who is disabled or suffers from a disease specified respectively in articles 80U and 80DDB, the amount of which received at maturity is exempt from tax provided that the premium paid does not exceed 15% of the sum insured.

The report also pointed out that the taxation, where the premium paid, is more than 10% of the sum insured – any money received from a life insurance policy, where the premium is more than 10% or 20% of the sum insured, as the case may be. be, is fully taxable.

Additionally, a policyholder can claim their TDS on these life insurance policies by filing an ITR. If a policyholder receives more than 1 lakh on their insurance policies and these are not covered by Section 10 (10D), then a TDS of 1% will be deducted by the insurer before making payment to the policyholder. The same deduction applies to premiums. In addition, if the amount received on the insurance policies is less than 1 lakh, then no TDS will be deducted but the amount will be fully taxable.

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