Life insurance is the best way to save your taxes. Since, nowadays your income generally going to the higher side which ultimately led to increase in tax bracket so the most adaptive method to save your hard earned income is to buy an insurance policy which saves your tax as well. In the insurance policy you have to pay certain amount named as premium of your life insurance policy per year and the premium you pay is also eligible for the tax benefits. By this way you not only provide financial security to your loved ones but also getting the benefits of additional income from tax.
If any profit generated from linked life insurance policy, then the tax benefits are also provided to the payee. Another advantage of life insurance is that it gives lump sum benefits to loved ones in case of death of the payee.
Here are 4 tax benefits you will get by taking life insurance policy:
1. For individuals and HUF: if any individual or HUF has taken life insurance policy and paying premium on it, get the deduction of Rs. 100000 on taxable income under existing income tax law.
2. On payment of bonus: any amount of insurance benefits received as lump sum payment from life insurance policy is considered as non-taxable.
3. Payment of premium on behalf of spouse: deduction is also available on the payment of life insurance premium on behalf of your spouse.
4. Policy maturity: life insurance policy is not at all taxable for deceased’s family.
These were the four main ways which can help in saving your taxes, so buy the insurance policy and make your life and your loved ones life secure and also save your hard earned money.