Is Your Life Insurance Policy Tax-Free?
Insurance plans have been one of the most popular tax-saving means for the general population. According to several surveys, almost 75% of the overall insurance-related products are sold in the months of January, February, and March. While there are a couple of insurance policies that offer you a certain amount of tax benefits (tax benefits up to Rupees 1 lakh under section 80c), new and updated rules, especially with the implementation of Direct Taxes, means that one would now have to be careful while selecting an insurance scheme because of the tax-benefits related to it.
There are several insurance platforms, which offer you some amazing tax benefits schemes such as Max Life's tax saving schemes. Not only schemes, but these platforms also help you with certain tax saving plans, which is sure to help you save some cash. Here are a few tax saving tips about life insurance policies that would surely help you save your hard-earned money..
1. Know the difference between tax and tax-less schemes.
Having a life insurance policy is always an addition to your hard-earned money. However, there are a few situations wherein your life insurance tax benefits are not applicable. There are instances where people fail to understand that not all insurance payments are tax-free. So make sure when buying a life insurance policy, always check whether or not your policy is exempted from taxation.
2. Change in Law for Tax Deduction
There has recently been a law change. According to the new law, now introduction of the Direct Taxes Code has laid down some strict conditions, which directly affect the deduction of premiums from taxable income from insurance policies.
3. New Direct Taxes Code
Though life insurance tax exemption might not be a clear thing anymore, it is important that we consider the new Direct Taxes Code. This code allows insurance firms to offer a cover that is 10 times the annual premium eligible for the tax rebate.