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How to Secure Income Tax Under Section 80C with Tata AIA Life Insurance Plans?

26-April-2022 |

Life insurance plans have become a basic need to secure your family in case of your unexpected demise. The Government of India also considers the importance of such financial products and encourages people to invest in them by providing tax benefits under the Income Tax* Act, 1961. And Section 80C is one of the most and best-used tax provisions that help policyholders secure their family's financial future while saving on tax*. So, let us get started and understand how you can benefit from purchasing Tata AIA term insurance plan and save on tax under Section 80C.

Before we understand how to save on tax, let us glance through the benefits of Income Tax* 80C of the Income Tax Act.

What is Section 80C of the Income Tax Act, 1961?

Section 80C of the Income Tax Act, 1961 provides a tax* deduction on your total gross income up to ₹ 1,50,000 to reduce your net taxable income for investments made on various financial products.

It includes financial expenditure incurred and investments made in

  1. Fixed Income Products such as Provident Fund, Public Provident Fund, National Savings Certificate, Tax Saving Fixed Deposits, etc.,

  2. Variable Return Products such as Life Insurance Premium, Equity Linked Savings Certificate, Pension Plans from life insurance companies, Unit Linked Insurance Plans(ULIP), etc.,

  3. Other expenses such as amount spent on home loan principal repayment, tuition fees for children, etc.

How to Secure Tax Benefits Under Section 80C with Tata AIA Term Plans?

Tata AIA term plan provides a range of benefits while saving on tax. The premium amount you pay towards purchasing Tata AIA term plans will qualify for tax benefits under Section 80C of the Income Tax Act, 1961.

  1. If the term policy is surrendered or terminated within two years from the beginning of the policy term, you will not be able to claim the deductions under Section 80C.

It is important to note that, under these conditions, the death benefit from the term plan also qualifies for tax exemption under Section 10(10D) of the Income Tax Act.

The tax deduction is applicable on the premium paid when you buy the term plan for self, spouse or children. The children can be minor or major for consideration. Also, this tax deduction under 80C applies to individuals and HUF.

Example

Let us consider an example to understand the tax benefits on term plans. Suppose Ms Kamala invests in Sampoorna Raksha Supreme term plan and pays a yearly premium of ₹30,000 for a sum assured of ₹28,00,000 and policy term 10 years. Her yearly premium does not exceed 10% of the sum assured. Therefore, the premium qualifies for tax deduction under Section 80C.

Here is the income tax calculation for Ms Kamala, considering her salary structure and investments in Life Insurance Term Plan and National Pension Scheme.

 

Particulars

Amount(₹)

Basic Salary(₹30,000*12)

360000

Dearness Allowance (20%)

72000

Total

432000

HRA

1000

Contribution by the employer to NPS

50000

Contribution by employee to NPS

50000

Gross Total Income

533000

 

 

Less Standard Deduction

50000

Gross Taxable Income

483000

 

 

Deduction under Section 80C

 

Contribution of Employer to NPS

43200

Contribution of Employee to NPS

43200

Premium paid for Sampoorna Raksha Supreme

30000

Total

116400

 

 

Net Taxable Income

366600

 

Tax Slab

Rate(%)

Tax(₹)

Upto 250000

Nil

Nil

250000 - 500000

5%

5830

Total

 

5830

Cess

4%

233

Total Income Tax Liability

 

6063


We can see a considerable decrease in the net taxable income and further the tax liability due to her investments. Therefore, it is important to make a financial plan with sufficient investments to secure life and tax savings. Here is a brief of term plans.

Tata AIA Term Life Insurance Plans

Tata AIA offers different term life insurance plans to provide customised financial solutions to policy seekers.

  1. Tata AIA Life Insurance Saral Jeevan Beema (UIN: 110N157V01)is the simplest and affordable pure protection plan. There is flexibility to choose the premium payment mode and frequency. You can also enhance the benefit by opting for additional riders# such as the critical illness rider#, terminal illness rider#, etc.

  2. Tata AIA Life Insurance Sampoorna Raksha Supreme (UIN: 110N160V02) provides death benefits with regular income, options to top up at different milestones in your life, optional comprehensive protection and health riders# etc.

  3. Tata AIA Life Insurance InstaProtect Solution combines the benefit of life coverage with accidental death, total and permanent disability, critical illness, hospitalisation expenses etc. You can also choose to receive the return of the premium amount paid if you survive the policy term by paying an additional premium but saving more on tax simultaneously.

Conclusion

While investing with Tata AIA term plans, you can choose from a range of the most affordable and comprehensive solutions while saving on tax*. Therefore, the premium amount you spend on purchasing the term plan will qualify for a tax* deduction based on the discussed terms and conditions. Moreover, you can customise the products based on your steady flow income and family commitments to maximise protection for your family in case of your unexpected demise. So start investing early, stay invested in the long term, and save more on tax!

 

L&C/Advt/2022/Apr/0859

 

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Need more information?

Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 

Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

People Like You Also Read

Understanding Deductions Under 80C
Read More
How to Maximise Returns with Tax-Saving Instruments
Read More
6 Frequently Asked Questions on Income Tax Returns
Read More
How to Fill an Income Tax* Return with Form 16?
Read More
8 Income Tax Benefits for Senior Citizens
Read More
What are the Various Income Tax Benefits for Doctors in India?
Read More
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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch

  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

  • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.

  • Past performance is not indicative of future performance.

  • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.

  • Please make your own independent decision after consulting your financial or other professional advisor.

  • Tata AIA Life Insurance InstaProtect comprises Tata AIA Life Insurance Sampoorna Raksha Supreme (Non-Linked, Non-Participating, Individual Life Insurance Plan) (UIN: 110N160V02) - Life Option (in case Return of Premium is No) or Life Plus Option (in case of Return of Premium is Yes), Tata AIA Life Insurance Non-Linked Comprehensive Protection Rider (NLCPR) (UIN: 110B033V02) - A Non-linked, Non-participating, Individual Health Rider; Tata AIA Life Insurance Non-Linked Comprehensive Health Rider (NLCPR) (UIN: 110B031V02) - A Non-linked, Non-participating, Individual Health Rider.

Need more information?

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.