As per Income Tax Act, 1961 one can save Income-Tax by making investments in different insurance products vide section 80 [C]; 80 [CCD] & 80 [D] of the Act.
Section 80 [C] of the Act States that Investments made in National Savings Schemes viz. National Saving Certificates; PPF/EPF; Life Insurance Policy premiums; Tax Saving F.D. of Bank; Equity Linked Saving Schemes of Mutual Fund etc; all combined up to Rs.1.50 Lac in a year by an individual or HUF qualify for Tax Rebate.
However, there is one extra benefit for investments in Life Insurance Policies, one can go in for a policy on his own life, or on the life of his wife, or on the life of his child whether minor or major; whether single or married; whether tax payer or non-tax payer for claiming rebate in Tax.
Likewise, a lady can take a policy on her own life or on the life of his husband or any child of any category as stated above and can claim the tax rebate for the premium paid during the year.
Besides, life insurance policies are regular savings schemes and one can plan for all future needs by taking policies for the period matching with their needs; and even the retirement need. Investments made in Life Insurance policies is the best because of several options and many good features:-
SECTION 80 [D] STATES:
That besides, tax rebate claimed for Life Insurance Policies premium through section 80 [C] & 80 [CCD] one can claim tax rebate vide section 80[D] of Income Tax Act upto Rs.25,000/- premium paid for Mediclaim Insurance of any General Insurance Company on his own life or on the lives of dependent family members. For Sr.Citizen this benefits is upto a premium of Rs.30,000/- per year for mediclaim policy on his own life and on the life of his wife; if both are Senior Citizens.
Life Insurance Policy premiums deposited vide Section 80 [C] upto Rs.1.50 Lac Maximum; Plus Rs.50,000/- under section 80 [CCD] (in pension scheme) plus Rs.25,000/-for Health Insurance/Mediclaim Insurance. Thus the total amount of Rs.2,25,000/-maximum is deducted from the total income and tax is to be levied on the Net Taxable Income of an individual or HUF.
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