Tax Benefits gain with Life Insurance

Income-tax provisions for the Financial Year ending 31st March, 2007 :

Under Sec.80C of the Income Tax Act.
Premiums paid upto maximum of Rs.1,00,000 subject to maximum of 20% of Capital sum Assured under Traditional & Unit linked Plans.

Under Sec.80CCC of the Income Tax Act.
Premiums paid upto maximum of Rs. 1,00,000 under pension plans.

However, u/s.80 CCE, the aggregate amount of deduction under section 80C, section 80CCC, and section 80CCD shall not, in any case exceed one lakh rupees.

Under Sec.80DD of the Income Tax Act.
Premiums paid under plans exclusively for physically handicapped persons upto Rs.50,000/-In case of severe disability as certified & issued by the medical authority upto Rs. 75,000/-

Exemption of Life Insurance Proceeds :

Under Sec.10(10D) of the Income Tax Act.

• Maturity benefits are tax free. However in cases where premium exceeds 20% of capital sum assured within a year, benefits paid in excess of premiums paid will be taxable.
• Death benefits are tax-free.