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

Tax Deductions
Sec 80C
 
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.
Sec 80D
 
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
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.–
For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.
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.
 
 
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.

Disclaimer -  "Above is a broad understanding of the Income Tax Provisions and is subject to changes in the tax laws. Therefore the same 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".