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What are tax benefits offered by term insurance?

Term insurance plans are of great help when you are looking to save on tax. Any policyholder, who has purchased a term plan to secure his/her loved ones, becomes eligible to receive tax benefits as per the Income Tax Act 1961: 

Following are the term insurance tax benefits:

Tax Benefit Under Section 80C

As per Section 80C, life insurance premium up to Rs. 1.5 lakhs is exempted from taxable income, per annum. This sum can likewise include premiums paid for your spouse and additionally kids. However, if the premium paid exceeds 10 percent of the sum assured, the benefit will be limited only up to 10 percent.

Tax Benefit Under Section 10 (10D)

Aside from saving tax on premiums, as per section 10 (10D), you can also save tax on the returns; as the death benefit is completely absolved (tax-free) under the provisions of this section. This exclusion is given to the nominees and comes without any upper limit.

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