term plan tax benefits

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Term plan tax benefits
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How life insurance save tax ?

• Both your protection and term plan tax benefits
  are provided by life insurance. This article
  investigates the consequences of tax savings.
  Lets first examine how your taxable income is
  determined in relation to the tax-saving
  investments you make in order to comprehend how
  you might save tax on life insurance.
• Let's say Rs 5,00,000 is the taxable share of
  your income. According to your income category,
  this means that your tax obligation for the year
  would be calculated at Rs 5,00,000. So, for
  example, if a particular investment option is
  reported to provide a tax benefit of up to Rs
  50,000 annually, this Rs 50,000 is subtracted
  from your taxable income, which is Rs 5,00,000.
  Your tax obligation would therefore be based on
  Rs. 4,50,000.
• However, you must be able to demonstrate that you
  are using your money to pay the premiums for
  these options. Do keep in mind that you cannot
  claim life insurance tax benefits on the same
  plans in a given year with your employed spouse.

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A few benefits on tax benefits on life insurance

• If the insurance was obtained after April 1,
  2012, and the premium paid does not exceed 10 of
  the total assured under the policy, you may be
  eligible for a deduction under Section 80C. The
  premium cannot exceed 20 of the sum guaranteed
  if the insurance was purchased before April 1,
  2012.
• If the premium paid does not exceed 15 of the
  sum assured, you may be entitled to claim a
  Section 80C deduction if you acquired a life
  insurance policy for a disabled family member or
  if the condition applies to you. However, the
  handicap must be registered under Section 80U of
  the Income Tax (IT) Act, and the terminal illness
  must be listed under Section 80DDB.
• If the premium does not exceed 10 of the sum
  assured, the maturity amount of a life insurance
  policy is not subject to Section 10D taxation. If
  the premium is more than 10 of the amount
  assured, the exemption is not applicable.
• Policies whose maturity amount exceeds Rs.
  1,00,000 are subject to TDS, which may be
  reclaimed by filing an ITR for the following year.

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