You can save taxes under Section 80 C with LIC policies. LIC offers tax benefits that are available in the form of deductions. To save taxes, you can claim the tax benefit as deductions or exemptions.
While deductions and exemptions may sound similar, they are not. Deductions are available when one pays the premium for buying a LIC policy.
On the other hand, exemptions are given to a person when they receive a benefit from the LIC policy.
DEDUCTIONS YOU CAN GET UNDER SECTION 80 C
Under Section 80 C of the Income-tax, deductions on the cost of the premium paid towards a LIC policy are one form of tax benefits. You can get them for the following policies:
Some of them are as follows:
- LIC Term plan
- LIC Life Insurance Policy
- LIC Endowment Policy
- Money-back Policies etc.
So, if you pay the premium, then you can avail the deduction. However, there are some points that you need to keep in mind. They are as follows:
- You can claim a deduction only for a monetary limit that goes beyond INR 1.5 lakhs.
- Further, you do not have to worry about not being able to pay a premium for someone in your family. If you are an individual taxpayer, you can pay for your spouse and children.
- Another great thing about LIC is that it lets you pay for any member, especially if you belong to a Hindu Undivided Family.
- Now, your premium should be less than 20% of the sum assured if you availed the policy before 1st April 2012.
- Further, the premium should be more than 10% of the sum assured if you avail the policy on or after 1st April 2012.