Income tax benefits of having Insurance

Tax Savings on health insuranceWith the recent revision of Income Tax slabs, the scope of investments through various Tax saving instruments has widened giving thrust for ‘Goal based’ savings for each individual in tune with their requirements. The very concept of giving Income Tax rebates for Insurance premiums was introduced with the twin objective of mobilizing ‘peoples money for peoples welfare’ and for inculcating the habit of small savings to meet various goals of one’s personal life like children’s education, construction/purchase of house and for creating corpus fund for retirement.

This concept has proved over the years that an individual’s short-term and long-term goals can be met successfully if there is discipline and consistency in managing one’s personal finances through Life Insurance policies.

Life Insurance products typically offer the following benefits to the policy-holder:

  • Financial protection for the dependents in case of an unforeseen event.
  • Income Tax rebates for the premiums paid yearly as per Tax laws.
  • Regular and stable returns as planned and Tax free maturity benefits.

Note: Rupee movement has to be considered while trading in Dollar denominated international commodities.

Section of IT Act 1961

Total eligible amount for IT Rebate/details

Sec 80 C - premium paid during the year towards Traditional/ULIP Insurance plans (or)
Sec 80 CCC - premium paid during the year towards Traditional/ULIP Pension Plans
(Provided the sum assured is atleast 10 times of the Annual Premium)

Rs. 1,50,000

Sec 80 D - premium paid during the year towards Health Insurance policyRs.15,000/- for self and family and Rs.15,000/- for parents or in-laws. Rs.20,000/- if parents or inlaws
are over 60 yrs of age (A maximum of
Rs.35,000/- paid in a year under this category)

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