LIC Premium policies are found to be providing a lot of people with the financial security that they are seeking for. It is a very good option that helps the people with a tension free life as it is supposed to provide a family with the required financial support in the absence of the main source of income for them. There is a misconception among the people that taking an LIC policy will help only in case of the death of the policyholder. But the fact is something different. There are a lot of other policies also available in the market that can be useful for a person during his life itself. Apart from this, there is another major benefit of LIC policy which a lot of people are making use of. It is the tax saving feature of the LIC Premium policy that I am talking about.
I am very much sure that majority of the people are aware of the LIC plan’ s ability to help them in saving a fair amount of tax that is to be paid otherwise. But most of them are not sure about what exact impact LIC plans can make on their income tax returns and how to make the maximum benefits of the LIC premiums in tax saving purpose. So here we are providing the effect of the LIC India plans on income tax return of a professional. It is the Section 80C of the Income Tax Act that provides the exact explanation for the maximum tax benefit that one can achieve through an LIC Policy. As per the 80C, a maximum deduction of 1,50,000 can be obtained under this Act.
The LIC Premium falling under this category can be hence counted to a maximum of this amount along with the others included in this section. An important thing to remember at this stage is that along with your own policy you can also claim for the policies in the name of your spouse and even your children. There is no fixed age for the child and hence you can even claim for your son/daughter who is even married. Even though there are different type of LIC policies available in the market, all of them are eligible for this tax deduction under 80A. As the LIC policies provide the users with a feature to avail loan from there, it is seen that people are trying to claim the loan repayment amount also for tax exemption. However, this amount will not be considered for tax exemption under any circumstances.
Another point to be noted while claiming tax exemptions for LIC premium payments is that you can claim only for those payments that you have done in the current financial year. If an installment is pending for payment and you are planning to pay it the next year, you can’t claim it for the current year tax exemption.