LIC policyholder? Check 5 tax benefits on your insurance premiums

Working-class individuals are liable to pay tax on their income from all sources. At present, there are no taxes for income up to Rs 2.5 lakh for individuals below 60 years of age, and the benefit is applicable on income up to Rs 3 lakh for those above 60 years of age but below 80 years, while Rs 5 lakh income for above 80 years of age. Others have to pay a certain amount to the Income Tax department, as a part of their tax payment. The amount depends upon the income class category you fall under.  The tax benefits are given in the form of standard deductions and various investments. When we talk about investment, insurance is also among the most opted one. 

Currently, state-owned Life Insurance Corporation of India (LIC) is among the largest insurance policy provider - be it for life insurance, health insurance, pension plans or others. LIC policyholders can claim tax benefits on their LIC policies. Take a look:

1.  Deduction allowable from Income for payment of Life Insurance Premium (Section 80C)

Life Insurance premium paid in order to effect or to keep in force an insurance on the life of the assessee or spouse or any child of assessee and in the case of HUF, premium paid on the life of any member thereof under an insurance policy is eligible for deduction only to the extent of 20% of the actual capital sum assured or actual premium paid whichever is less. These are meant for the policies which are issued before March 31, 2012. 

While policies which are issued after April 01, 2012, deduction is eligible to the extent of 10% of the actual capital sum assured or actual premium paid whichever is less. As for policies issued after April 01, 2013, who are person with disability or diseases then deduction under this section is allowed only to the extent of 15% of the actual capital sum assured or actual premium paid whichever is less.

2. Jeevan Nidhi Plan & Jeevan Suraksha Plans (under section 80CCC) 

A deduction to an individual for any amount paid or deposited by him from his taxable income in the above annuity plans for receiving pension (from the fund set up by the Corporation under the Pension Scheme) is allowed.

3. Deduction under section 80D

Deduction allowable upto Rs.25,000/- if an amount is paid to keep in force an insurance on health of assessee or his family (i.e. Spouse & dependent children) or any contribution made to the central Government Health Scheme. As for Hindu Undivided Family (HUF), similar deduction is allowable. 

Additional deduction upto Rs.25,000/- if an amount is paid to keep in force an insurance on health of parents or on account of Preventive health check –up of the parent of the assessee, whether dependent or not . 

If you are paying premium for insurance on health  of family or parents, if any one of them is a senior citizen then deduction available will be up to Rs.30,000/-. Here senior citizen means the person who is of sixty year or more during the previous year.

If the amount is paid on account of preventive health check up, the deduction for such amounts shall be allowed to the extent it does not exceed in aggregate Rs. 5,000.

4.  Exemption in respect of commutation of pension under Jeevan Suraksha & Jeevan Nidhi Plans:

Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans is exempt from tax. 

5.  Jeevan Aadhar Plan (Sec.80DD) : 

Deduction from total income upto Rs.75000/- allowable on the amount deposited with LIC under Jeevan Aadhar, Jeevan Vishwas plan for maintenance of an handicapped dependent (Rs.1,25,000/- where handicapped dependent is suffering from severe disability).