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What are the Tax benefits available?

Important Income Tax provisions applicable to Policyholders are :
An individual can claim rebate on premium paid on his/her life, his/her spouse, his/her children including adult children and married daughter.

Under section 88 of the Income Tax Act, certain percentage of rebate is allowed on investment in the form of insurance premium with any of the insurance company approved by IRDA. Percentage of rebate can be up to a maximum of 20% and varies depending upon the tax bracket one falls. This rebate is deductible from the tax payable by the individual. The total amount of investment in the form of insurance premium and other specified investments like PPF, NSC, etc. is restricted to Rs. 60,000 per annum.  

Under Section 80 DDA a deduction upto Rs. 40,000 p.a is allowed from gross total income, when a contribution or deposit is made with the LIC for the maintenance of a handicapped dependent.

Under Section 80 CCC a deduction up to a maximum of Rs. 10,000 per annum is allowed from gross total income.

Any sum received under insurance policy including maturity bonus etc., is non-taxable. The exceptions to this are Keyman Insurance, Jeevan Aadhar, Jeevan Dhara, Jeevan Akshay policies,

ICICI Pru Forever and Dhanaraksha scheme of LIC Mutual Fund.


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