The first thing comes in our mind is LIC (Life Insurance Premium) or LIP whenever we talk about deduction under section 80C.
But you all know it is only one of the part or deduction along with other deductions comes under section 80C.
Life Insurance Premium paid on the life insurance policies issued by LIC or by any registered Indian Insurance company will qualify for deduction under section 80C.
But there are some conditions, limitation, rules and regulation to claim deduction under section 80C of the income tax act for A.Y.2022-23 & A.Y.2021-22. We will talk about here complete detail about the LIC plans, tax benefits, tax brackets, maturity, cover, application procedure etc. You can also ask your queries via comment form given below.
- The policy should only belong to Life Insurance. So you cannot claim deduction under section 80C for other types of policies like accident, theft, etc. endowment assurance policy.
- The life insurance policy must be on the life of the assessee, or his/her spouse or his child. The child includes married daughter, dependent child, adopted child, step child and adult child.
- Premium paid on life insurance policies are eligible for deduction under section 80C up to a maximum of Rs.1,50,000 (A.Y.2022-23 & 2021-22). The deduction is also available to an HUF in respect of premium paid on life of any family member.
- Any amount received by the dependent or nominee on the death of policy holder is fully exempt.
- Any amount received including bonus under a life insurance policy is full exempt under section 10 (10D).
- There are lots of life insurance policies under Life Insurance Corporation and other registered Insurance Companies. So you can buy life insurance policy after comparison of returns, benefits, maturity and other tax benefits.
I want to clear here something very important that every person does not need insurance. Its all depends on the person in family dependent on you. Suppose if your wife is non-working and depended children, you must buy insurance. On the other hand, if you have enough assets to take care of liabilities and expenses of dependents then avoid life insurance and choose other investment options for better rate of return.
There are various types of policies comes under Life Insurance like Whole Life Policy, Endowment Assurance, Limited Life Policies, Money Back, Anticipated Whole Life, Term Plans and more. So you must get advice from your financial consultants ore read various financial planning guidance over the internet like Jago Investors, Money Control, RaagVamDatt.