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Tax Planning and Tax Benefits of Life Insurance

Tax planning with tax saving life insurance is the best way to save tax. Click here to know how to save income tax with life insurance and tax benefits of life insurance

  • Apr 02, 2019

Can you save tax while investing in life insurance?

Life Insurance is one of the most effective tools to ensure that your family is taken care of financially long after you are gone. It works not only in the future but also in the present by taking away your worries and concerns. Another great advantage that life insurance offers in the present day is tax benefit.

Turn Life Insurance into a tax planning tool

Life insurance policies can be useful tax planning tools, as the policy holder is eligible for tax benefits under the Income Tax Act, 1961. Though there are multiple modes for saving tax, life insurance is one of the most effective tax-planning instruments. You can not only save tax but also look at achieving long-term goals.

Invest in Term Insurance now and Secure your Loved Ones

More benefits from life insurance plans

Life insurance plans from Kotak Life Insurance provides several other benefits: life cover , wealth maximization opportunities, child’s future planning options, retirement planning options and all of them coupled with effective tax saving options.

Advantages of Tax Planning

Here are a few advantages of tax planning using life insurance policies from Kotak Life Insurance:

80C & 80CCC Deductions

In case of Individual Assessee, the benefits are available for himself/herself, spouse, the children

In case of Hindu Undivided Family (HUF) assessee, the benefits are available for any member of HUF.

Premiums paid under a life insurance policy are eligible for deduction under Section 80C* of the Act, subject to the provisions of the said section

Contributions to a pension plan are eligible for income tax deduction under Section 80CCC* of the Act, subject to the provisions of the said section

The aggregate amount of deduction under section 80C and 80CCC should not be more than Rs. 1.50 lakhs

If the amount of premium paid in a financial year for a policy is more than 10% of the actual capital sum assured, then deduction will be allowed only for premiums up to 10% of the actual capital sum assured.

Exemption Under Section 10

The proceeds under a life insurance policy are exempt under Section 10(10D) of the Act, subject to the provisions of the said section.

Goods and Services Tax

All premiums and charges are subject to applicable taxes including gst on life insurance and cess as applicable, under the prevailing tax laws from time to time.

We suggest you consult your tax adviser to know more about tax benefits applicable to your life insurance plans.


This information should not be construed as expert tax, legal or investment opinion from Kotak Mahindra Life Insurance Company Limited (formerly known as Kotak Mahindra Old Mutual Life Insurance Limited) & Company would not be responsible in any manner for decisions made on the basis of above information.

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