Your life is your ultimate investment and the well-being of your family is your principal asset. And when you invest in Max life insurance policies you ensure an economically secured future for your beloved ones.
There is a common perception that the premium which is paid towards the life insurance policies is completely free of tax. It might be true in specific circumstances. It is important for an investor to have knowledge about when the premiums are exempt from tax and when they aren’t. When a policyholder is mindful of the tax implications, he/she could avail the tax benefits.
Understanding the significance of life insurance policies is one thing. However, understanding the intricacies of tax rules is other. Since insurance products have progressed and become more complex, the line separating the investment vehicles and insurance vehicles has become unclear. When you appreciate all the intricacies of tax planning, you would not lose any penny to taxes. If you don’t have the time nor the in-depth knowledge to decipher the income tax regulations, here are some life insurance related information which would help you take proper investing decisions.
Life insurance plans offer several benefits: life cover, child’s future planning, wealth maximization opportunities, retirement planning and all of them combined with efficient tax saving options.
Section 80C of Income Tax Act,1961
As per provisions contained in Section 80(C) of the Income Tax Act, 1961, the premium which is paid towards life insurance policies up to INR 1.5 lakh is entitled to tax exemptions. The clauses governing this rule are mentioned below:
The Bottom Line
Life insurance policies are long-term commitments. Select the right one depending on your investment requirements. The tax provisions related to life insurance are understandably complex and changes over time. The selection of life insurance products shouldn’t be based only on tax benefits.