Hello friends and welcome to our new blog post. Today we come up with the most important topic that is tax benefits on your Life Insurance under Section 10 (10D) and how they may impact you.
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Well, we all know how important it is to have a life insurance. Purchasing life insurance is really important especially if your spouse and children are dependent on your income to survive. Though life insurance cannot make up for the emotional loss, but it will ensure that your family members will be financially secure.
There are hundreds of plans for various needs and age groups. But while choosing a plan, you also need to consider the tax implications of taking a life cover too. Earlier, people used to buy life insurance policy to ensure protection of their families and claim tax, but now that will not be possible.
In the Budget 2023, it has been proposed to put an upper ceiling on the tax benefits against proceeds from traditional life insurance policies. The finance minister Nirmala Sitharaman made an announcement about the sudden change in income tax rules. It is proposed that if the premium for life insurance policies [other than ULIP] issued on or after April 1, 2023 is above ₹5 lakh is to be now taxable. best financial advisor in Lucknow
Proceeds from life insurance premium over the annual premium of ₹5 lakh would be taxable from new financial year i.e., from 1st April 2023. If you had planned to purchase a life insurance policy with an aggregate premium of more than Rs 5 lakh in a year, you could do it before 31st March 2023 to save the tax on insurance proceeds in the future. This will help you get better results with both life coverage and investments.
The proposal will not affect the tax exemption provided to the amount received on the death of the insured person, nor it will affect insurance policies issued till March 31, 2023. There will not be any change in taxation for polices issued before April 1, 2023.
So, once this budget proposal on life insurance becomes applicable from 1st April 2023, the life insurance benefit on up to ₹5 lakh per annum premium will become tax exempted. Those who are looking for life insurance plans can now avail till 31st March 2023. There is no time to think more about getting your life insurance policy or not. Meet your financial advisor today and get your life insurance policy before 31st March 2023. Rush to get benefit of Section 10 (10D).
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