• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Your Finance Book

Income Tax | Investing | Stock Market

  • Stocks
    • 10 reasons why share prices decline in the stock market
    • What to look for in growth investing strategy for better return
    • 10 things you must understand before buying stocks
    • Speculating Vs Investing Vs Saving
    • 5 Risk free tax saving investments
    • A beginner’s guide to understand stock’s value – Explained with examples
    • Mutual Fund Basics
  • GST
    • GST registration in India – all you need to know
    • Tax invoice in GST-A complete beginner’s guide for taxpayers
    • Input tax credit in GST – A beginners guide to claim ITC
    • What is inter-state supply of goods and/or services under GST
    • What is intra-state supply of goods and/or services under GST
  • Income tax
  • Tax Rates
  • ITR Due dates

Life Insurance Premium – Income Tax Deduction u/s 80C of Income Tax Act

Last Modified on May 9, 2014 by Editorial Staff

Income Tax Deduction for Life Insurance Premium PaidMany people in India invest in a Life insurance with a view to save tax as the policy holder can claim up a maximum of Rs. 1, 00,000 as tax deduction from his taxable income under section 80C of Income tax act, 1961. Deduction for life insurance is applicable only when the policy holder has paid or deposited the premium during the previous year for which he is claiming the deduction.

Who are allowed to claim deduction on Life Insurance?

  1. Individual Assessee including salaried person, self employed person and other individuals and
  2. Hindu Undivided Family  

How much is eligible?

The maximum eligible amount for deduction under section 80C for life insurance premium is Rs. 1, 00,000. This maximum limit of Rs. 1, 00,000 deductions is not specifically available for life insurance. This is available for various other investments mentioned under section 80C and if you are not investing in such other investment options then you can claim Rs. 1, 00,000 as deduction for life insurance premium. For detail on such investment options please refer section 80C of Income tax act, 1961.

From assessment year 2013-2014 onwards if the amount of premium paid by you in a financial year for a life insurance policy is in excess of 10% of the actual capital sum assured then the deduction will be restricted to 10% of the actual capital sum. For assessment year 2012-2103 this limit was 20%. For calculating sum assured you should not include any premium agreed to be returned or any benefit by way of bonus

For whom you can make Life Insurance payment?

As per the provision of section 80C of income tax act, an individual can invest in life insurance policy;

  1. On his/her own life
  2. On the Life of spouse
  3. On the life of Any child (child may be married/unmarried, male/female, minor/major)

In the case of Hindu Undivided Family the life insurance policy can be taken in the name of any member of the family.

Deduction under section 80C of income tax act is available only when you make the payment or deposit the life insurance premium. All the above benefits of getting deduction for life insurance premium paid shall be reversed if the policy terminated or cease to be in force within 2 years after the date of commencement of such insurance policy.

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)

Filed Under: deductions, Income tax Tagged With: life insurance premium

About the Author

Editorial Staff at Yourfinancebook.com is a team of finance professionals. The team has more than a decade experience in taxation, stock market and personal finance.

Primary Sidebar

Financial Ratios

  • Accounting tools you can use to choose a winning stocks
  • What are the tools and techniques used in financial statements analysis
  • Can Price to earnings – P/E ratio be used for stock investing
  • Why Price earnings to growth – PEG is used by investors
  • How Earnings per Share or EPS can help you
  • How to use debt to equity – D/E ratio
  • What is Interest coverage ratio

Don’t see a topic? Search our entire website:

Email Newsletter

Sign up to receive email updates daily and to hear what's going on with us!

Privacy Policy

Popular Posts

  • How to protect yourself from stock market frauds and scams
  • Income tax rates for Financial Year 2021-22 and 2022-23
  • How to decide which strategy is right for you in stock investing
  • Stock market basics – A complete guide for beginners
  • How to get tax deductions on Life Insurance Premium – Section 80C
  • Why to use Japanese candlestick charting for trading and investing
  • 10 most commonly used stock market jargons you must know
  • How tax is deducted from Salary – 192
  • Tax to be deducted on Professional Fees – 194J
  • TDS On Rent – 194I
  • Things to remember while buying stocks on margin
  • Top 20 reasons why income tax PAN is a must for Indians

Footer

Trending Now

  • What to look for in the financial statements before investing in stocks
  • How to manage fund while investing in stocks
  • A beginner’s guide to mutual fund investing
  • Why share prices move up and down in stock market
  • Price Action trading – How candlestick helps to read mass psychology

Stay In Touch With Us

  • Twitter
  • Facebook

SITE LINKS

  • About Us
  • Contact Us
  • Terms and Conditions
  • Disclaimer
  • Privacy Policy
  • Finance

Legal Disclaimer

The information available through this Site is provided solely for informational purposes on an “as is” basis at user’s sole risk. The information is not meant to be, and should not be construed as advice or used for investment purposes. Yourfinancebook.com does not provide tax, investment or financial services and advice. We make no guarantees … Continue Reading... about Disclaimer

Copyright © 2021 yourfinancebook.com · All Rights Reserved.