Overview
The income
tax benefits of paying towards term insurance are in the form of deductions as
well as exemptions.
You can deduct from your taxable income to a total of Rs. 1 lakh in certain instances, such as your insurance payments from gross income under Section 80C of the Income Tax Act.
You can also seek exemption from gross income under Section 10 (10) D for any sum
received from insurance policy as maturity proceeds, death benefits are exempt
from tax.
For insurance policies issued after 01 April 2003, where the premium payable for any of the years during the term of the policy exceeds 20% of the sum assured, the insured will not be eligible for Sec 10(10) D benefit.
Term Insurance Tax: Basics
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