Highlights
Life insurance insurance policies additionally get tax exemption on premiums up to Rs 1.5 lakh.
Under 194DA, tax will be deducted on the charge of 5 % on the maturity quantity of the policy.
In the brand new regime, there will be no tax exemption on life insurance insurance policies below 80C.
New Delhi. Most of the buyers use life insurance policy for household safety in addition to for tax saving. There are many choices out there in this. Some buyers pay the premium of the life insurance policy on an annual foundation and a few buyers imagine in paying it in lump sum. If you additionally need to purchase a single premium life insurance policy ie a policy that pays a lump sum premium, then it will be important to know some guidelines associated to saving tax.
Under Section 80C of the Income Tax Act, a single premium life insurance policy can also be eligible for tax exemption on premium up to Rs 1.5 lakh. Not solely this, the quantity acquired on maturity (together with bonus) of a single premium life insurance policy issued after April 1, 2012 can also be tax free. However, for this it’s needed that your annual premium ought to not exceed 10 per cent (15 per cent in case of incapacity) of the sum assured quantity of your policy.
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…then revenue tax will be deducted
Manoj Jain, an skilled in tax issues, says that if in any case the annual premium of a single premium life insurance policy is greater than 10 %, then they will have to pay tax on the maturity quantity of the policy. The involved insurance firm will find a way to deduct tax on the charge of 5 % on the maturity quantity of that policy below part 194DA of Income Tax.
they gained’t get any low cost
Such taxpayers who go for the brand new regime of revenue tax will not get any tax exemption on life insurance policy below part 80C of Income Tax. However, even within the new regime, the quantity acquired on maturity of the policy will be given the good thing about tax exemption below part 10(10D) of Income Tax. However, if an individual has zero annual revenue, then he will be given tax exemption below 80C on the premium of the life insurance policy. Even although he has opted for the brand new tax regime.
It is essential to notice right here that even when you are paying the premium of a single premium insurance policy by 10% greater than the sum assured, you will not get tax exemption. This signifies that if you have a sum assured of Rs 18 lakh and the annual premium goes up to Rs 2 lakh, then tax exemption will not be given on it.
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Tags: business information in hindi, revenue tax, Income tax exemption, Insurance, Life Insurance
FIRST PUBLISHED : November 06, 2022, 12:31 IST
