Income Tax Return Filing: The due date for filing ITR for the assessment
year 2022-23 is nearing. Notably, the government is not planning to
extend the ITR filing deadline from July 31. Thereby, it is important to
ensure, that you file your ITR on or before the timeline to avoid
penalties. To encourage savings and investments amongst taxpayers the IT
department provides various deductions from the taxable income. A
taxpayer is needed to intimate about their income from other sources in
the ITR. These also include investments under life insurance policies.
That said, if you are filing for ITR, take note of these tax benefits
under your insurance policies. Section 80C is one of the most popular sections available in the income tax. If a policyholder has paid a premium on life insurance to insure his or her life or on the life of the spouse or any child of
the assessee and in the case of HUF, then such premiums paid are
eligible for benefit under section 80C. However,
it needs to be noted that, these life insurance policies are issued on
or before the 31st day of March 2012, and they shall be eligible for
deduction only to the extent of 20% of
the actual capital sum assured or actual premium paid whichever is
less. In case, if the insurance policy is issued on or after the 1st day
of April 2012 shall be eligible for deduction only to the extent of 10%
of the actual capital sum assured or actual premium paid whichever is
less. In
case, if the life insurance policy is issued on or after April 1, 2013,
on the life of a person with a disability as referred to in section
80U, or suffering from disease or ailment as specified under section
80DDB - then the premium paid will be eligible for tax exemption to the
extent of 15% of the actual capital sum assured or actual premium paid
whichever is less. Further, income tax exemption is given on maturity or death claims under life insurance policies under section Section 10(10D). According
to Clear, an income tax services provider, report, when the premium
paid on the policy does not exceed 10% of the sum assured for policies
issued after 1 April 2012 and 20% of the sum assured for policies issued
before 1 April 2012– any amount received on maturity of a life
insurance policy or amount received as a bonus is fully exempt from
Income Tax under Section 10(10D). Also covered here are policies taken
after 1 April 2013, on the life of a person with a disability or a
disease specified under Sections 80U and 80DDB respectively, where the
amount received on maturity is tax-free provided the premium paid does
not exceed 15% of the sum assured. The
report also highlighted that taxation, where the premium paid, is more
than 10% of the sum assured – any money received from a life insurance
policy, where the premium is more than 10% or 20% of the sum assured as
the case may be, is fully taxable.
