Life Insurance Tax Benefits
- Why Tax Benefits In Insurance
- Deductions In Income Tax
- Eligibility For Tax Benefits
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Updated on Apr 08, 2025 6 min read
You can save the income tax on the life insurance policies under various life insurance tax benefits section:
Under Union Budget 2025, Finance Minister Nirmala Sitharaman has announced new income tax slab rates for FY 2025-26.
| Income (in Rs) | Tax Rate (in %) |
| Rs 0 to 4 lakhs | 0 |
| Rs 4 lakhs to Rs 8 lakhs | 5 |
| Rs 8 lakhs to Rs 12 lakhs | 10 |
| Rs 12 to Rs 16 lakhs | 15 |
| Rs 16 to Rs 20 lakhs | 20 |
| Rs 20 lakhs to Rs 24 lakhs | 25 |
| Rs 24 lakhs and above | 30 |
Individuals earning up to Rs 12 lakhs are exempted from paying income tax. You can claim tax benefits on the premiums paid for your life insurance policy.
You can avail tax benefits under life insurance policies at various stages. Let’s understand how tax benefits apply to life insurance policies.
pert InsightsIn Union Budget 2025, Finance Minister Nirmala Sitharaman announced that ULIPs with annual premiums greater than Rs 2.5 lakhs are treated as capital assets and subjected to capital gains. The tax exemption for ULIPs with annual premiums less than Rs 2.5 lakhs is applicable under Section 10 (10D) of the Income Tax Act, 1961.
You can choose add-ons or additional riders with your life insurance policy to enhance your policy coverage. These riders offer benefits in specific conditions. There are various rider options available to choose from including accidental death benefit rider, waiver of premium rider, critical illness rider, accidental disability rider, etc. Every rider costs you a certain premium amount.
Here are the applicable tax benefits on rider premium payments:
Life insurance is an ideal way to secure your family’s financial future. The government offers various tax benefits to promote the sale of life insurance policies. The tax benefits are applicable under Section 80 (C), Section 80 (D), Section 10 (10D), and Section 80 CCC of the Income Tax Act, 1961. Before buying a life insurance plan you should compare them on various parameters including CSR, solvency ratio, market reputation of the insurer, etc on the PolicyX.com premium calculator. If you are still confused about which life insurance policy is best then you can contact us at PolicyX.com. We offer No Spam, No Gimmicks, and Only Expert Insurance Advice.
Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.
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Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
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