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Yes, term insurance is covered under 80C. Term insurance not only offers vital protection for your family but also helps you save on taxes. Under Section 80C, you can claim up to ₹1.5 lakh annually with term insurance tax deductions on the premiums paid. Let us take a look at how you can make the most of these Section 80C deductions while securing your loved ones' future.
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Yes, term insurance comes under Section 80C deductions, which allows you to claim deductions on the term insurance premiums paid. The section 80C life insurance is one of the most popular tax-saving sections, allowing 80C tax deductions of up to ₹1.5 lakh in a financial year. However, it is important to note that you can claim tax benefits under 80C and 80D sections of the IT Act, 1961. However, it is important to note that term insurance comes under 80C or 80D, only if you still follow the old tax regime, as the new tax regime does not provide term insurance tax benefits under these sections.
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Term insurance under 80C tax benefits allows you to save on yearly taxes, as the premiums you pay for different types of life insurance are eligible for tax deductions. You can claim tax deduction of up to ₹1.5 lakh annually on the premiums paid for term insurance under 80C.
How Much Tax Can I Save with Term Insurance Under Section 80C?
The amount you can save depends on the premium you pay for your term insurance policy. Under Section 80C deductions, you can claim a maximum of ₹1.5 lakh. This means, depending on your tax bracket, you could save up to ₹46,800 annually (if you're in the highest tax bracket of 30%).
Can I Deduct Premiums for Multiple Term Insurance Policies Under Section 80C?
Yes, you can claim 80C tax benefits for premiums paid on multiple term insurance policies, as long as the total premium amount paid does not exceed the ₹1.5 lakh annual limit. If you have several term insurance policies, you can add up the premiums and claim the total deduction, provided you meet the eligibility criteria.
Can I Claim Deductions for Term Insurance Premiums Paid Through Credit Card or Bank Transfer?
Yes, you can claim 80C deductions for term insurance premiums paid through any mode of payment, including credit card, debit card, cheque, or bank transfer, as long as the payment is made within the financial year.
Is LIC Premium Covered Under Section 80C or 80D?
LIC premium is eligible for tax deduction under 80C, not Section 80D. Section 80D covers health insurance premiums and health riders, whereas 80C deductions includes premiums for life insurance policies like LIC, term insurance, and other similar policies.
Can I Claim My Wife’s Term Insurance Premium Under Section 80C?
Yes, you can claim the term insurance premium paid for your wife’s policy under Section 80C deductions, as long as you are the policyholder and the one making the payment. Similarly, a wife can claim the 80C tax benefits for her husband’s term insurance if she is paying the premium. The policy must be in the respective spouse’s name to qualify for the tax benefits under 80C.
Can I Claim Tax Benefits for Term Insurance if It’s for My Parents?
No, Section 80C deductions are only applicable on term insurance premiums for policies in your name, or for your spouse and children. To claim term insurance tax deductions for parents, you would need to look under Section 80D, which allows deductions for health insurance premiums paid for parents.
A term insurance policy offers tax benefits under 80C and 80D in the following ways:
Term insurance under Section 80C, offers tax deductions for the premiums paid towards keeping the term insurance policy active.
Term Insurance under Section 80D is applicable only for term insurance policies with health riders like critical illness, terminal illness, or hospicare riders, where deductions are available for health rider-related premiums.
The term insurance 80C deduction can provide a maximum of ₹1.5 lakh tax benefits per year, therefore, insurance advisors suggest keeping premiums within the 1.5 Lakh limit.
The term insurance under 80C tax deduction is available only if the total premium paid does not exceed 10% of the sum assured.
You should always keep records of the 80C life insurance policy and premium payment receipts.
When filing your income tax returns, report these premiums under the "Deductions" section and submit necessary documentation if required.
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Term insurance under 80C deductions not only secures your family's future but also helps you save on taxes. By opting for term insurance, you can enjoy peace of mind, knowing that your family will be taken care of in your absence and benefit from significant tax savings with term insurance 80C deductions.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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