Tax Implication of LIC New Bima Bachat Plan

Having a life insurance plan is one of the necessities of the current time. To increase its demand, the government has allowed deductions on tax on the amount of premium that you require to pay regularly.  The New Bima Bachat plan is an important tax planning option as it offers the dual benefit of protection and savings.

Read more
LIC Plans-
Buy LIC policy online hassle free
Tax saving under Sec 80C & 10(10D)^
Guaranteed maturity with life cover for securing family's future
Sovereign guarantee as per Sec 37 of LIC Act
LIC life insurance
We are rated~
58.9 Million
Registered Consumer
Insurance Partners
26.4 Million
Policies Sold
Now Available on Policybazaar
Grow wealth through
100% Guaranteed Returns with LIC
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on ''View Plans'' you, agreed to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp
We are rated~
58.9 Million
Registered Consumer
Insurance Partners
26.4 Million
Policies Sold

Let’s discuss LIC New Bima Bachat tax implications: 

What is LIC’s Bima Bachat Plan? 

LIC’s New Bima Bachat is a non-linked and participating plan that offers an attractive combination of protection and savings. In this life insurance plan, the premium is waged in a lump sum amount at the commencement of the plan. It is a money-back policy that provides financial security against demise at the time of the plan tenure. Additionally, it also offers the facility of survival benefit payments at particular periods during the plan term. 

Moreover, at the time of maturity/vesting, the single premium is returned with the loyalty additions. The plan offers tax benefits as per the prevailing laws of the Income-tax act, 1961 i.e., on premiums paid under section 80C and the claims received u/s 10(10D). 

LIC New Bima Bachat Tax Implications 

In this policy, the insurer promises to pay a certain amount of money called a sum assured to the beneficiary/nominee of the policyholder in case he/she passes away. If a policyholder outlives the tenure of the plan, maturity benefits are paid out to the individual. Apart from these benefits, the plan also offers tax benefits on premium paid and claim amount as per prevailing laws. Read on to know more about tax benefits: 

  1. Section 80C 

    • This tax benefit is accessible to people assessed and HUV i.e., Hindu Undivided Family assesses. 

      • In individual assesses – Herself/himself, children, and spouse 

      • In HUF assesses – Any of the HUF members 

    • If the premium amount paid in a fiscal year for a plan is more than 20 percent of the real capital SA, then the deduction will only be allowed for the premium amount up to 20 percent of the SA. 

    • For the policies which are issued on or after the 1st April 2012, the deduction is allowed of only that much-paid premium as it does not exceed 10 percent of the real capital SA. 

    • The above-mentioned benefits can be reversed in case of the plan is ceased/ terminated to be in force within two years for traditional insurance products and five years for ULIP after the commencement date of the plan. 

  2. Section 10(10D) 

    This section exempts you from paying taxes on the amount that you get from the life insurer. In this, the sum assured amount and the bonus received at the time of maturity or policy surrendering or on the policyholder’s demise are completely free of taxes, subject to certain T&Cs. 

    If the yearly premium of a plan exceeds 10 percent of the SA, the profits from such policies are not exempted from taxes. 

    Let’s understand with the help of an example: 

    Imagine your life insurance policy has a yearly premium of Rs. 1.25 lakhs and Rs. 8 lakhs are the life cover. In such a case, the tax benefit u/s 80C will be capped at around 80000. Additionally, any profits from such plans are taxable. 

Benefits From LIC New Bachat Plan Are Taxable!

  1. Death Benefits 

    It is paid in case of policyholder’s demise during the insurance policy tenure is as under: 

    • Upon the death during the initial five years of policy – Sum assured amount on death 

    • Upon death after completing 5 years of policy – Sum assured amount on death plus loyalty additions 

    Sum assured on death received by the nominee is the highest of: 

    • 1.25X the single premium 

    • Basic SA 

    The single premium mentioned above does not include taxes, additional, and rider premium. 

    Profits from the LIC Bima Bachat during the policyholder’s demise are exempted from income tax. 

  2. Survival Benefits 

    • For policy tenure 9 years 

    15 percent of the SA after the third and sixth year of the plan 

    • For policy tenure 12 years 

    15 percent of the SA after the third, sixth, and ninth year of the plan

    • For policy tenure 15 years 

    15 percent of the SA after the third, sixth, ninth, and twelfth year of the plan. 

    The payouts received are also free of taxes u/s 10(10D) as per the ITA, 1961. 

  3. Maturity Benefits 

    In case if the policyholder survives the policy term, the sum assured on maturity is paid along with the guaranteed additions. In this, the sum assured on maturity paid excludes taxes, rider, and additional premium. 

    The payouts received are also free of taxes u/s 10(10D) as per the  ITA, 1961. 

Should I Purchase LIC Bima Bachat to Save Taxes? 

Most of us buy life insurance policies to save on income tax u/s 80C. Any of the benefits that are received from the life insurer is exempted from the Income-tax. The plan offers statutory taxes. Statutory taxes are applicable as per the income tax laws and the rate is also applied from time to time. The sum of applicable taxes according to prevailing prices, shall be paid by the life assured on the single premium involving the rider premium and the additional premium which is collected as a separate, in addition to a premium paid by the policyholder. The amount a policyholder pays shall not be considered for the computation of benefits that are payable under the scheme. 

Wrapping It Up!

LIC Bima Bachat is a money-back plan that provides financial protection against death during the plan tenure. Apart from this, the plan also provides tax benefits u/s 80C and 10(10D) as per the ITA, 1961. It is a smart tax-saving tool. The LIC Bima Bachat tax implications are discussed above for your smooth understanding.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:-
++Returns are 10 years returns of Nifty 100 Index benchmark

LIC of India
LIC Plans
LIC Amritbaal
LIC Index Plus
LIC Jeevan Dhara II-872
LIC Jeevan Utsav
LIC Jeevan Kiran
LIC Dhan Vriddhi
LIC Monthly Investment Plans
LIC Jeevan Azad
LIC 1 Crore Endowment Plans
LIC Jeevan Labh 1 Crore
LIC Crorepati Plan
LIC Dhan Varsha - Plan No. 866
LIC Pension Plus Plan
LIC New Jeevan Shanti
LIC Bima Ratna
LIC Group Plans
LIC Fixed Deposit Monthly Income Plan
LIC Savings Plans
LIC’s New Jeevan Anand
LIC New Jeevan Anand Plan 915
LIC's Saral Jeevan Bima
LIC's Dhan Rekha
LIC Jeevan Labh 836
LIC Jeevan Jyoti Bima Yojana
LIC Child Plans Single Premium
LIC Child Plan Fixed Deposit
LIC Jeevan Akshay VII
LIC Yearly Plan
LIC Bima Jyoti (Plan 860)
LIC’s New Bima Bachat Plan 916
LIC Bachat Plus Plan 861
LIC Policy for Girl Child in India
LIC Samriddhi Plus
LIC New Janaraksha Plan
LIC Nivesh Plus
LIC Policy for Women 2024
LIC Plans for 15 years
LIC Jeevan Shree
LIC Jeevan Chhaya
LIC Jeevan Vriddhi
LIC Jeevan Saathi
LIC Jeevan Rekha
LIC Jeevan Pramukh
LIC Jeevan Dhara
LIC Money Plus
LIC Micro Bachat Policy
LIC Endowment Plus Plan
LIC Endowment Assurance Policy
LIC Bhagya Lakshmi Plan
LIC Bima Diamond
LIC Anmol Jeevan
LIC Bima Shree (Plan No. 948)
LIC Jeevan Saathi Plus
LIC Jeevan Shiromani Plan
LIC Annuity Plans
LIC Jeevan Akshay VII Plan
LIC SIIP Plan (Plan no. 852) 2024
LIC Jeevan Umang Plan
LIC Jeevan Shanti Plan
LIC Online Premium Payment
LIC Jeevan Labh Policy-936
LIC Money Plus Plan
LIC Komal Jeevan Plan
LIC Jeevan Tarang Plan
LIC Bima Bachat Plan
LIC’s New Money Back Plan-25 years
LIC Money Back Plan 20 years
LIC Limited Premium Endowment Plan
LIC Jeevan Rakshak Plan
LIC New Jeevan Anand (Previously LIC Plan 149)
LIC New Endowment Plan
LIC Varishtha Pension Bima Yojana
LIC Investment Plans
LIC Pension Plans
Show More Plans
LIC Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

LIC of India articles

Recent Articles
Popular Articles
LIC Jeevan Utsav vs LIC Jeevan Umang

07 Jun 2024

4 min read

LIC Jeevan Utsav and LIC Jeevan Umang are two popular insurance
Read more
Review of LIC Index Plus

07 Jun 2024

2 min read

I recently bought LIC's Index Plus plan, which has provided me
Read more
LIC Versus PPF

05 Jun 2024

3 min read

When it comes to financial planning in India, two of the most
Read more
LIC Amritbaal Premium Calculator

29 Mar 2024

2 min read

LIC Amritbaal Premium and Maturity Calculator is an online tool
Read more
LIC New Endowment Plan Maturity and Premium Calculator

04 Mar 2024

2 min read

LIC's New Endowment Plan premium and maturity calculator allows
Read more
LIC Online Premium Payment

3 min read

The LIC Online Payment by Policybazaar enables policyholders to pay their insurance premiums online at their
Read more
10 Best LIC Plans to Invest in 2024

3 min read

Since 1956, LIC of India has offered several policies that combine insurance protection with wealth accumulation
Read more
How to Check the Maturity Amount of LIC Policies?

3 min read

The LIC maturity value is the amount payable to the policyholder upon the completion of the policy term. LIC
Read more

Download the Policybazaar app
to manage all your insurance needs.