How LIC schemes helpful in Income Tax?, Various beneficial exemptions

How LIC schemes are helpful in Income Tax? This article is for various exemptions available to the assessee while investing in the securities of the LIC. Life Insurance Corporation is the only source where the deductions under the Income tax are available which are beneficial from both the side. These expenses have been given exemption and the sum received as a maturity amount or the amount received at the death of any person is also exempt. Now check more details for “How LIC schemes helpful in Income Tax?” From below….

How LIC schemes helpful in Income Tax?

Various beneficial exemptions:

1. The investments done in the plans of LIC such as Jeevan Nidhi Plan or New Jeevan Surakhsha Plans u/s 80CCC, which are the plans for receiving the pensions in the later stage fall under the category of the exemption and any amount deposited in the scheme, would be allowed as deduction subject to maximum exemption of Rs. 1,50,000. This limit of Rs. One Lakh fifty thousand is for the aggregate of the sections – 80C, 80CCC & 80CCD.

But as per new sub section inserted in the Act, i.e. 80CCD(1B), there has been an additional deduction of Rs Fifty thousand which is apart from the above limit of Rs One lakh fifty thousand in case of Pension schemes.

2. Deductions under section 80D for the Mediclaim policies taken for the insurance of the person would be allowed as deduction. The maximum amount of deduction would be as follows:

  • Deduction is allowable up to Rs. Twenty five thousand for the individual having the age less than sixty years.
  • If the amount is paid for the parents or spouse or the children of the assessee than the assessee would be given additional deduction of Rs. Twenty five thousand.
  • If the insured person is of the age of more than 60 years than the deduction amount available to the assessee would be Rs Thirty thousand.
  • If the person has paid to insurance company is not an Individual and is HUF than the person would be eligible for the deduction if the insurance or the Mediclaim is taken for the member of HUF.
  • The deduction of preventive health check up would also be eligible for deduction if the amount is Rs. Five thousand or less.

The mode of payment of the premiums would not matter whether it is through cash or by way of cheque in case of health check up while in case of other cases than the payment has to be made with the cheque only.

3. No TDS Deduction – There has been exemption from the deduction of TDS in case of payment from LIC is upto Rs. One lakh. So if you receive any amount which is less than Rs. 1 lakh, then no TDS will be deducted. The scheme of self declaration is also available for the policy holders of LIC which is to be made in Form 15G or 15H.

4. Any amount received by way of bonus on the policy taken or the amount received on the death of the insured person, is exempt under the Income Tax with some conditions. Any pensions received under the schemes of the government such as Jeevan Nidhi or Jeevan Suraksha shall be exempt for the purpose of calculation of Taxable Income.

5. As usual there would be exemptions available under section 80C which almost every assessee claims.

Must Read –