LIC Jeevan Labh: Tax Benefits under Section 80C and 10(10D)

LIC Jeevan Labh 736 (previously known as LIC New Jeevan Labh plan 936) is a limited premium paying endowment plan that offers financial protection through both death and maturity benefits. As a tax saving instrument, the LIC Jeevan Labh policy offers significant tax-saving benefits under Section 80C and 10 10(D) of the Income Tax Act, 1961. The LIC of India Jeevan Labh plan can be a strategic choice as it helps you reduce your taxable income through the 80C LIC premium deduction benefit while providing financial cover.

Tax Savings with LIC Jeevan Labh under Section 80C

Under Section 80C, individuals can claim tax deductions for premiums paid toward life insurance policies. Here’s how it works:

• Eligible Premiums: Any premium you pay for your LIC policy contributes to your Section 80C limit, which is capped at ₹1.5 lakh per financial year.

• Tax Savings Calculation: If you invest the full ₹1.5 lakh, you could save approximately ₹46,800 if you fall under the highest tax bracket of 30%. For those in the 20% bracket, the savings can amount to around ₹30,000.

• Premium Limit: It's essential to remember that for the policies issued after April 1, 2012, the deduction is valid only if the premium is less than 10% of the sum assured.

• Eligible Ownership: The annual premium you pay for the life coverage is eligible for tax savings deduction under Section 80C, even if the policy is not under your name.

When to Invest for Maximum Benefit?

To take full advantage of the tax benefits under Section 80C, consider buying your LIC Jeevan Labh policy between April 1 and March 31 of the following financial year.

For instance, if you pay your Jeevan Labh policy LIC premium on March 10, 2026, you can claim that amount in your 2025–26 tax return. However, if you wait and pay on April 2, 2026, the benefit shifts to the 2026–27 financial year.

Opting for a yearly premium payment mode ensures you qualify for deductions in that financial year. It means you pay the entire premium at once, making the full amount eligible for deduction in that year.

Tax Savings with LIC Jeevan Labh under Section 10 10(D)

In addition to the deductions available under Section 80C, all payouts including maturity benefits, and surrender values from the LIC of India Jeevan Labh plan are also tax-free under Section 10(10D).

• Death Benefits: In the unfortunate event of the policyholder’s death, the nominee of the LIC Jeevan Labh policy will receive the entire payout tax-free under Section 10(10D) of the Income Tax Act.

• Maturity Benefits: Under Section 10(10D) of the Income Tax Act, the entire maturity benefit received from the LIC Jeevan Labh policy is exempt from tax, regardless of the size of the payout. The tax benefits extend to the full payout, including all vested bonuses and final additional bonuses, if any. For policies issued after April 1, 20212, the tax exemption is only applicable if annual premium does not exceed 10% of the sum assured.  

Wrapping It Up

Buying the LIC Jeevan Labh policy not only secures your family's financial future but also offers significant tax savings. With benefits under both Sections 80C and 10(10D), this policy serves as a dual-purpose tool—providing peace of mind and aiding in effective tax planning.

LIC Resources

FAQs