TAX BENEFITS UNDER INSURANCE POLICIES SUBMITTED TO:- SEEMA KHANA MAM SUBMITTED BY:- KHUSHPREET KAUR M.COM (SEM-3)
TAX BENEFITS UNDER
INSURANCE POLICIES
SUBMITTED TO:-
SEEMA KHANA MAM
SUBMITTED BY:-
KHUSHPREET KAUR
M.COM (SEM-3)
INTRODUCTION
There are two or more persons who are involved
in the insurance contracts like other commercial
contract. The person
involved in insurance contract are called insurer
& the insured. As the obligation of these persons
are different therefore, the provisions of income
tax are also different which are explained as
under:-
Taxation
insured insurer
individua
l
Business
organisatio
n
Life
insurer
General
insurer
Reinsurer
INCOME TAX FOR LIFE
INSURANCE
POLICYHOLDERSDeduction allowed from income for
payment of life insurance premium sec.
80 C :-Under section 80 C , a deduction of Rs 1,50,000 can be
claimed from your total income. In simple terms, you can
reduce upto Rs 1,50,000 from your total taxable income
through sec. 80 c. This deduction is allowed to an individual
or an HUF.
If you have paid excess taxes, but have invested in LIC,
PPF, Mediclaim etc, you can file your income tax return &
get a refund.
Deduction for premium paid for
annuity plan of LIC or other insurer
sec.80 ccc
This section provides a deduction to an
individual for any amount paid or deposited in
any annuity plan of LIC or any other insurer.
The plan must be for receiving a pension from
a fund referred to in section 10 (23 AAB).
If the annuity is surrendered before the date of
its maturity, the surrender value is taxable in
the year of receipt.
Deduction for premium paid for
medical insurance (sec. 80 D)
Deduction is available upto Rs 25,000 to a
taxpayer for insurance of self, spouse and
dependent children. If the individual or spouse
is more than 60 years old the deduction
available is Rs 30,000.
For uninsured super senior citizens (more than
80 years old) medical expenditure incurred
upto Rs 30,000 shall be allowed as a deduction
under section 80 D.
Deduction for contribution to
pension account (section 80 CCD)
Allowed to an individual who makes deposits
to his/her pension account. Maximum
deduction allowed is 10% of salary (in case
the taxpayer is an employee) or 10% of gross
total income (in case the taxpayer being self
employed) or 1,50,000 whichever is less.
From FY 2017-18 :- in case of self employed
individual, maximum deduction allowed is 20%
of gross salary instead of 10%.
Deduction for self contribution to
NPS section CCD (1B)
A new section 80 ccd (1b) has been
introduced for an additional deduction of upto
Rs 50,000 for the amount deposited by a
taxpayer to their NPS account.
Employers contribution to NPS section 80 ccd
(2) additional deduction is allowed for
employers contribution to employees pension
account of upto 10% of the salary of the
employee. There is no monetary ceiling on this
deduction.
Key man insurance section 37
(1)
The premium paid by the company is allowed
as a 100 % deductible business expenditure of
the income tax act. The proceeds received by
the company at the time of the maturity or
death of the key man is treated as income of
the company and will be subjected to the tax.
Sum received from life insurance
policy section 10(10D)
Any sum received under a life insurance
policy, including a sum allocated by the way of
bonus on such policy shall not be included in
the total income of person.
The exception is , however , not available in
respect of such policy which is specified under
sec. 80 DDA(3) or under a key man insurance
policy.
NON LIFE INSURANCE
POLICYHOLDERS
Medical insurance premium sec. 80 D :-
It provides hospitalization benefits. Under section 80
D of income tax act 2017, the premium paid for
mediclaim is eligible for tax deduction. Income tax
deduction is the complementary benefit that you can
avail when you are paying the premium of a
mediclaim policy. The policy can be in the name of :-
Your
Your spouse
Dependent children
Parents who are not dependent on you
THE TOTAL DEDUCTION THAT CAN BE
CLAIMED UNDER SECTION 80 D :-
Description medical premium tax
paid for,& maximum deduction
tax deduction u/s 80 D
self, spouse & parents
dependent (depen-
children dent or
not)
No one in the upto
family is a senior Rs 25,000 upto
Rs50,000
citizen Rs25,000
One or all your family upto upto Rs 55,000
(you, spouse or Rs 25, Rs 30,
Children) is a senior 000 000
citizen
If your parents (father, upto upto upto
Mother or both) are Rs 30, Rs 30, Rs 60,000
Senior citizen 000 000
Amount received from insurer
(section-45(1A))
Where any person receives at any time during
the previous year any money or other assets,
from insurer under a contract of insurer as a
result of demage to or destruction of any
capital asset caused by
a) Natural calamity such as flood, earthquake,
cyclone, etc
b) Civil disturbance or riots or
c) Enemy action (whether there is war or not)
Any profit or gain from receipt of such money or
Other assets, shall be chargeable to tax as
capital gain as income of the previous year in
which such amount or other asset is received.
INSURANCE PREMIUM {sec.
36(1)(i)The amount of any premium paid in respect of
insurance against risk of demage or
destruction of stocks or stores, used for
purpose of business or profession is allowed
as deduction.
Insurance premium paid by a
federal milk co-operative society
{sec.36(i)(ia)} Insurance premium paid by the federal milk co-
operative society on the lives of cattle, owned
by the members of a primary milk co-operative
society affiliated to it, is allowed as deduction.
Insurance premium on health of
employees under section 36(1)(ib)
A deduction can be claimed by a taxpayer if the following conditions are satisfied. The taxpayer pays premium to keep in force an insurance on the health of employees. The premium is paid by cheque. However, from the previous year 2007-08, such premium can be paid by any mode other than cash. Premium is paid under a scheme framed in this behalf by the general insurance corporation of india & approved by the central government(or with effect from the assesment year 2007-08,under a scheme approved by IRDA.
Income from other sources
sec.56(2)
Following gifts received by individual or HUF
are taxable
Gift of money gift of gift of movable
immovable property
property
Cash gift greater a)if received a)if received
than 50,000 is without without
Taxable consideration consideration
then stamp then fair
duty value> market value >
50,000 taxable 50,000 taxable
b)if received for b)if received for
inadequate consi- inadequate consi-
deration (stamp deration (fair
duty value- market value-
consideration)> consideration)>
50,000 taxable 50,000 taxable
(aggregate
Of all cash (aggregate of all gifts of
Gifts movable property to be
Received taken to calculated 50,000
In year to limit)
Be taken to
Calculated
50,000 limit)
Exceptions :-
Gifts from relatives
Gift received on occasion of marriage
Under will/ inheritance
Any trust
In contemplation of death (no will has been
prepared but a person is about to die & he
gives some amount to any person)
Any local authority
Any university / fund/ foundation/education/
hospital/ medical institution etc (sec.10(23c))
Tax deduction at source from
insurance commission (section
194D) The provision of section 194 D towards tax
deducted at source (TDS) from insurance
commission are given below :-
a)Who is the any person paying insurance
Taxpayer ? commission
b)Who is the at resident person
Recipient ?
c)Payment insurance commission
covered
d)At what time tax has at the time of payment
To be deducted at or at the time of credit,
Source whichever is earlier
e)Maximum amount if the amount of
Which can be paid payment is 20,000 or
Without tax deduction less than 20,000(15,000
from 1st june 2016)
f)Rate of tax deducted 10%+surcharge + educat-
At source ion cess,if the recipient
is resident non-
corporate assesse
20%+surcharge + educat-
ion cess,if the recipient is
resident corporate assesse
g) is it possible to get the recipient can make
the payment without tax an application in form
Deduction or with lower no. 13 to the assessing
Tax deduction officer to get a certifi-
cate of lower tax
deduction or no tax
deduction
THANK YOU