Query about LIC Tax Benefit

On this page: https://www.licindia.in/tax_benefit.htm

papa 2 (1) (a) says.... Life Insurance premia paid in order to effect or to keep in force an insurance on the life of the assessee or on the life of the spouse or any child of assessee & in the case of HUF, premium paid on the life of any member thereof, Provided premium paid is not in excess of 20% of capital sum assured.

What is the meaning of 20% of capital sum assured

I am a bit confused about this.... if anyone can explain (may be with a short example) it will be much appreciated!

Thank you in advance.

Replies (6)

Dear Sanjay,

Suppose u paid premium of Rs. 40,000 on the Policy - Value  of which  Rs. 1Lacs

Then u/s 80 C u can get only 20% of sum assued as deduction i: e 20,000....(20% of Rs. 1 Lac)

Dear Sanjay...

Mr.Amir brother is rite....

example is also good......

80 C - 20% of sum assued as deduction i: e 20,000....(20% of Rs. 1 Lac)


 


 

Yes deduction restricted to 20% of the sum assured for a year

yes Sanjay sir ur policy will have the assured amount in it...so max 20% of tat can be claimed as ded in an year

Also keep in mind that at the time of receipt of sum assured other than in case of death the full amount will be taxable unlike the other lic plans in which the sum assured is tax exempted under section 10 (10 d)

20% is to be calculated on the the sum assured... for purpose of tax benefit

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