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| Tax Benefits |
| Life Insurance and Tax Benefits: |
Max New York Life’s insurance plans can be used for protection, investment and tax planning. There are two kinds of income tax benefits available to individuals:
Deductions
Exemptions
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Tax Deductions
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| Life insurance premium paid by you for any MNYL product qualifies for a deduction under Section 80C of Income Tax Act, 1961. You will be able to claim deduction on premium paid for a maximum of total income subject to a aggregate ceiling of Rs 1,00,000 p.a. including deduction under section 80CCC and 80CCD. Under Section 10(10D) of the Income Tax Act, any sum received, other than the sum received under Keyman Insurance Policy, including bonus is exempt from tax. Sec 80D
The qualifying amounts under Section 80D is upto Rs.15,000. However, a higher amount of upto Rs.20,000 is allowed if the person for whose health insurance the premium was paid, was resident and aged 65 years or more at any time during the financial year in which the premium was paid. Please note that life insurance premium paid by you for your wife/husband's policy qualifies for a deduction under Section 80C of the Income Tax Act, 1961. |
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| In computing the total income of an asseesee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable
to tax. |
| Where the asseesee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:- |
| he whole of the amount paid to effect or to keep in force an insurance on the health of the asseesee or his family as does not exceed in the aggregate fifteen thousand rupees; and |
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| The whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the asseesee as does not exceed in the aggregate fifteen thousand rupees.
Explanation.– |
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| For the purposes of clause (a), “family” means the spouse and dependant children of the assessee. |
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| Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees. |
| Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words “fifteen thousand rupees”, the words “twenty thousand rupees” had been substituted.
Explanation - For the purposes of this sub-section, “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year. |
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| Exemption from the proceeds |
Commuted pension: 10(10A)(iii)
One-third of the Value on vesting date would be tax free |
| Life Insurance Proceeds: 10(10D) |
- This includes any sum received from insurance policy as maturity proceeds, death benefits
- Proceeds of keyman insurance are taxable
- The single premium policies would be taxed as income in the year it is received assuming that premium exceeds 20% of the sum assured.
- Please note that an insurance policy issued after 1st April, 2003 with respect to which the premium payable for any of the years during the term of the policy exceeds 20% of the actual capital sum assured, will not be eligible for Sec 10(10D) benefit. This won't be applicable for any sum received on the death of a person.
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Disclaimer - "Above is a broad understanding of the Income Tax Provisions and therefore is not specific advise in regard to your Personal tax and investment matters. Kindly contact your tax consultant for exact calculation of your tax liabilities". |
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| Answer - 1: |
Rebate is available under Section 80C of Income Tax Act, 1961. For the financial year 2008-09, the basic income tax exemption limit has been raised from Rs1,10,000 to Rs1,50,000. The exemption for women asseesees has been raised from Rs1,45,000 to Rs1,80,000, and for senior citizens it’s raised from Rs1,95,000 to Rs2,25,000. |
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| Answer - 2: |
Under Section 80CCC, where you have paid premiums for any pension plan, you will receive pension from a fund referred to in Section 10(23AAB). You will be able to avail a deduction of upto Rs 10,000 from the total income. |
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| Answer - 3: |
Please note that the maturity proceeds of life insurance policies are not taxable. Under pension plans, you can even withdraw up to one-third of the total maturity amount in cash and the same would be tax-free. |
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| Answer - 4: |
Life insurance premium paid by you for your wife/husband's policy qualifies for a deduction under Section 80C of the Income Tax Act, 1961.
For financial year 2008-09, all classes of assesses are entitled to additional relief under Section 80D. If the medical insurance premiums are incurred for the benefit of the taxpayer's parents, the maximum exemption under section 80D will be Rs50,000 instead of the earlier Rs15,000. |
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| Answer -5: |
Life insurance premium paid by you for your wife/husband's policy qualifies for a deduction under Section 80C of the Income Tax Act, 1961.
For financial year 2008-09, all classes of assesses are entitled to additional relief under Section 80D. If the medical insurance premiums are incurred for the benefit of the taxpayer's parents, the maximum exemption under section 80D will be Rs50,000 instead of the earlier Rs15,000. |
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| Answer -6: |
If you chose to discontinue a Unit Linked Insurance Plan, you are not entitled to any tax benefits. |
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| Answer -7: |
Under Sec 80D you will be able to claim tax benefits on premium paid for any medical/health insurance. Qualifying amounts under Section 80D is up to Rs.15,000. However, a higher amount of up to Rs.20,000 is allowed if the person, for whose health insurance the premium was paid, was resident and aged 65 years or more at any time during the financial year in which the premium was paid. |
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