Most LIC Policies offer Tax Benefit under Income Tax Sec 80c.
Tax Benefit is an additional benefit of buying a LIC life insurance policy. Under Income Tax Sec 80(c), contribution towards life insurance policy is allowed as deduction in income, thereby decreasing tax liability. Income tax rates increases along with the increase in your income, you can save your hard earned money by investing it in the Lic Insurance Plans.
LIC Premiums paid towards the policy of self, spouse or children shall be eligible for income tax benefits.
Income Tax Slab for Individuals under 60 years of age:
Income upto 2,00,000 - No Tax.
2,00,001 to 5,00,000 - 10% Tax
5,00,001 to 10,00,000 - 20% Tax
10,00,001 and above - 30% Tax.
Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D). As per Section 10(10D) of the Income Tax Act, 1961, any sum received under a Life Insurance Policy, including the bonus on such policy is exempt from tax. Benefits where the sum is received as a death benefit is also exempt from tax.
Maximum deduction allowed as tax benefit is Rs.1,50,000 and includes all other tax exempted financial products too which fall under section 80C of the Income Tax Act. Also, the combined maximum limit for deduction under section 80C, 80CCC and 80CCD is Rs.1.5 lakh, currently.