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Matters related to money should receive careful consideration as a lot of effort and commitment goes into earning it. In order to maximise wealth, minimising the tax liability is an important objective. This section will guide you to the investment avenues which have tax provisions associated with them. News on the latest tax issues is updated on a regular basis. Our consultants shall be pleased to discuss with you any specific tax query that you may have. You can even download Income Tax form('Saral' ) from this section. Further, the tax tools section will assist you in working out scenarios for efficiently planning your tax
   
 
 
Life insurance is one of the most popular savings/ investment vehicles in India . Ironically it is probably the least understood too. An insurance policy offers much more than just tax planning and investment returns. It offers you the ability to plan for unforeseen events that could affect your family's financial problem adversely
  Benefits
  The benefits under income tax are of two types
 
 
   
Sec 80C
Deduction is available amounting to Rs. 1,00,000

The benefit for life insurance premium u/s 80C is restricted to 20 % of the actual capital sum assured. Surrender of Plan before premium has been paid for two years will result in reversal of tax benefit.

80CCC
 
Deduction in respect of contributions to pension funds
Maximum Rs 10,000
Flexi Secure Life Retirement Plan from Birla Sun Life Insurance provides all the benefits you can also withdraw money as and when needed.
Surrender/Withdrawal will be subjected to tax.
Pension received will be subject to tax.
Sec 80 CCE
Under section 80CCE, the overall limit for deductions u/s. 80C, u/s. 80CCC and u/s. 80CCD is Rs. 1 lakh.

80D

 
Deduction in respect of medical insurance premium
Individual or HUF, whether resident or non-resident
Maximum Rs. 10,000; an additional Rs 5,000 for senior citizens
The BSLI Critical Illness Plus rider covering an array of illnesses gives dual benefit of tax saving along with CI cover when it is needed the most.
 
Benefits of investing in life insurance plans of BSLI
Premiums paid for all Life Insurance products of BSLI eligible for deduction, namely Flexi Save Plus Endowment Plan , Birla Sun Life Term Plan , Premium Back Term Plan, Medicare Plan, Flexi Cash Flow Money Back Plan, Flexi Life Line Whole Life Plan , Classic Life, Flexi Secure Life Retirement Plan, My Child Plan, Women First Plan.
 
Other investment avenues
Other products which are eligible for investments are - PF, PPF , ULIP , NSC , Superannuation Plan etc
   
Commuted pension: 10(10A)(iii)
One-third of the Value at vesting date would be tax free
   
 
10(10D)
 
Any sum received from insurance policy as maturity proceeds, death benefits.
Proceeds of key man insurance are taxable
Single premium policies will be taxed as income in the year it is received assuming that premium exceeds 20% of the sum assured.
An Insurance policy issued after 1st April 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20 % of the actual capital sum assured will not be eligible for Sec 10(10D) benefit. This will not be applicable for any sum received on the death of a person.
 
Net amount taxable                                                                       (A) 4,30,000  
Income under House Property      

Interest on Housing Loan                                                           (B)

(1,50,000)  
Deduction

Critical illness premium - 80 D                                                  (C)

10,000  

Life Insurance premium -80 C *                                                (D)

90,000  

Pension Investment - 80 CCC                                                   (E)

 10,000   
Taxable Income  (A-B-C-D-E)                                                     (F)   1,70,000
Tax Liability on (F)                                                                        (G)   9,000
Education Cess                                                                           (K)   180 
Total tax                                                                                   (G+K)   9,180
  Note:

1) Assuming that there are no other investment such as PF, PPF etc *

2) Life Insurance Policy of face value Rs.5, 00,000 *

3) For Women the tax liability will be Rs. 5,610 and for senior Citizen the liability will be (NIL)

4) Financial Year 2005-06 (Assessment Year 2006-07)

   
  Form 2 E
 
  Form 2 D
 
   
  Disclaimer
 
1.
The above are extracts from the Income tax Act, 1961. Please note that tax laws are subject to change and hence before placing reliance on the above, the latest version of the above section should be checked up. It should also be noted that the change in tax laws could have a retrospective effect also.
2.
This information should not be construed as tax, legal or investment opinion from BSLI. BSLI would not be responsible in any manner for decisions made on the basis of the above information.
3.
Please consult your tax advisor for specific suitability of insurance products applicable to case specific to the user of this information.
     
 
   
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Birla Sun Life Insurance Company Limited, 6th Floor, Vaman Centre, Makhwana Road, Off Andheri-Kurla Road,
Andheri (East), Mumbai 400059