Close Button Close Button
X
NRI Services Helpline

Calling FromPhone Number
Calling us from INDIA+91 20 6712 1212
Rest of the World+91 20 6787 1700

  • Home >
  • Life Insurance Tax Benefits

Life Insurance Tax Benefits

Life insurance tax benefits in India can be useful as they help you save money and protect your family, securing their financial future. Paying premiums for life insurance policies also grants you the benefit of tax deductions under Section 80C, if you opt for the old tax regime. Read More


Moreover, if you meet other specific conditions, the amount your family receives from the policy is also tax-free under Section 10(10D), subject to certain terms and conditions. This way, you can make your life insurance a helpful part of your financial planning, making it a simple way to get both savings and security for the future. Read Less

Term Insurance
Get In Touch To Know More

Are you an NRI?

Select Country
  • australia-flag Australia
  • austia-flag Austria
  • belgium-flag Belgium
  • canada-flag Canada
  • Czech-republic Czech Republic
  • denmark-flag Denmark
  • england-flag England
  • finland-flag Finland
  • france-flag France
  • germany-flag Germany
  • greece-flag Greece
  • greenland-denmark Greenland (Denmark)
  • holland-flag Holland
  • hong-kong-flag Hong Kong
  • hungary-flag Hungary
  • iceland-flag Iceland
  • ireland-flag Ireland
  • italy-flag Italy
  • japan-flag Japan
  • kingdom-of-bahrain Kingdom of Bahrain
  • kuwait-flag Kuwait
  • luxemburg-flag Luxembourg
  • mauritius-flag Mauritius
  • netherland-flag Netherlands
  • new-zealand-flag New Zealand
  • netherland-flag Northern Ireland (UK)
  • norway-flag Norway
  • oman-flag Oman
  • poland-flag Poland
  • portugal-flag Portugal
  • qatar-flag Qatar
  • romania-flag Romania
  • saudi-arabia Saudi Arabia
  • scotland-flag Scotland
  • singapore-flag Singapore
  • slovania-flag Slovenia
  • Flag_of_South_Korea.svg South Korea
  • Flag_of_Spain Spain
  • Flag_of_Sweden Sweden
  • Flag_of_Switzerland.svg Switzerland
  • Flag_of_the_United_Arab_Emirates.svg United Arab Emirates
  • Flag_of_the_United_Kingdom United Kingdom
  • Flag_of_the_United_States USA
  • vatican-fag Vatican City
  • wales-UK Wales (UK)
I agree and consent to theTerms & Conditions, Privacy Policy

*T&C Apply | BJAZ-WB-EC-08291/24

Are you diabetic?

Gender

Tobacco/Nicotine

I agree and consent to theTerms & Conditions, Privacy Policy

*T&C Apply | BJAZ-WB-EC-08291/24

Customer rating
Rated by customers
Close button

Thank you for sharing your details. Our executive will get in touch with you shortly!

Get Your Life Goals, Done!

Tailored Life Insurance Solutions for your long-term Life Goals.

Term Insurance
ULIP Plans
Savings Plans
Guaranteed Return Plans
Retirement Plans
Child Plans
Written ByPalak Bagadia
AboutPalak Bagadia
LinkedIn Icon
Palak Bagadia, Associate – Digital Marketing at Bajaj Life Insurance, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry, with a strong understanding of the insurance sector.
Reviewed ByRituraj Singh
AboutRituraj Singh
LinkedIn Icon
Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 01st September 2025
Modified on: 02nd September 2025
Reading Time: 20 Mins
Share
left arrow icon right arrow icon

What are the Tax Benefits of Life Insurance?

Life insurance tax benefits offer dual advantages, like financial protection and tax savings. When you pay premiums for a life insurance policy, you become eligible for tax deductions under existing tax laws . These deductions can help lower your taxable income, offering yearly savings. In many cases, the amount received from the policy, whether at maturity or by your loved ones, is also tax-free if it meets certain conditions.

This way, you are sure that these exemptions can help you make a life insurance policy an effective way of tax planning. Life insurance plays a key role in your financial strategy and helps you secure your family’s future, but also enjoy long-term savings through tax benefits.

Tax benefits on Life Insurance plans

SectionTax benefit

Section 80C

Tax benefit on premiums paid up to Rs.1.5 lakhs per financial year in case of old tax regime

Section 80CCC

Tax benefit on premiums paid for pension plans, up to Rs.1.5 lakhs, including the deduction allowed under Section 80C in case of old tax regime

Section 80CCE

This section allows for a maximum deduction of Rs.1.5 lakhs under Section 80C and 80CCC in case of old tax regime

Section 80D

Tax benefit on premium paid for health insurance plans or health insurance riders. The limit is up to Rs.25,000 if you are below 60 or Rs.50,000 if you are a senior citizen in case of old tax regime

Section 80DD

Deduction allowed if you have a disabled dependent.

Limit is Rs.75,000 if disability is between 40% to 80% and Rs.1.25 lakhs if it is more than 80% in case of old tax regime

Section 10 (10A)

Exemption allowed on the commuted pension from a deferred pension plan. Limit of exemption is up to 1/3rd of the total corpus

Section 10 (10D)

Exemption allowed on payout under policy subject to satisfaction of conditions mentioned therein.

How to save income tax with life insurance plans?

Life insurance plans allow tax-saving benefits on -

  • The premium that you pay
  • The death benefit received
  • The maturity benefit received
  • Any form of bonus or guaranteed addition received from the plan
  • Partial withdrawals made under ULIPs
  • Surrender value received from a policy
  • Fund switching in a ULIP when you transfer your investment from one fund to another

These tax benefits are available under different sections of the Income Tax Act, 1961 and are available as per the conditions mentioned therein in the Act.

Tax benefits offered under the Income Tax Act, 1961

The Income Tax Act, 1961 offers tax benefits on life insurance policies in two ways –

- Deductions
- Exemptions

Difference between Deduction and Exemption

The literal meaning of deduction is subtraction. As such, deductions are applicable to your taxable income. They apply to the premiums that you pay towards a life insurance plan.

Exemptions, on the other hand, are applicable to any form of benefit that you receive from the life insurance policy which is tax exempt in the hands of recipient. The exemption applies on the –

Maturity benefit

Bonus and other additions

Surrender value

Partial withdrawals

Let’s have a look at the various deductions and exemptions that you can apply to a life insurance plan.

Deductions

The following deductions are available under Chapter VI A of the Act, for life insurance plans –

  • Deduction under Section 80C of the Act

  • Deduction under Section 80CCC of the Act

  • Deduction under Section 80CCE of the Act

  • Deduction under Section 80D of the Act

  • Deduction under Section 80DD of the Act

This section allows deduction on life insurance premiums that you pay. The section allows a deduction of up to an amount of Rs.1.5 lakhs annually. Premiums paid for any life insurance policy, except a pension plan, qualify for a deduction under this section.

 

The following conditions need to meet for availing deductions under Section 80C-

 
  • An individual or a Hindu Undivided Family (HUF) can claim the deduction.
  • The premium can be paid for self, spouse and dependent children. Premium paid for parents would not qualify for a deduction.
  • In case of HUFs, though, deductions are available for the premium paid for any member of the family.
  • In case the policy has been issued on or after 1st April 2012, the premium should not be greater than 10% of the death sum assured. However, in case the plan is issued before this date, the premium should be within 20% of the death sum assured.
  • The policy should be active for a minimum of two years. If the life insurance policy is surrendered within two years, the deduction would be reversed. The deduction you claimed would be added back to your income and taxed in the year when you surrender the policy. Above duration of 2 years is applicable for non-linked policies. For ULIP policies this duration is of 5 years.
 

If the life insured has a disability as specified under the Section 80U of the Act or suffers from a disease specified under Section 80DDB, and the plan is issued on or after 1st April 2013, premiums up to 15% of the death sum assured are allowed as a deduction.

 
  • The diseases specified under Section 80DDB are as follows –
    • Neurological diseases whose severity is 40% and above. The diseases are ataxia, dementia, chorea, Dystonia Musculorum Deformans, aphasia, motor neuron disease, hemiballismus and Parkinson’s Disease.
    •  Chronic renal failure
    •  Malignant cancer
    • Full-blown AIDS,
    •  Haemophilia or Thalassemia
  • The deduction under Section 80DDB is available for individuals and HUFs for medical expenses incurred for treating the aforementioned diseases or ailments.
 

Let’s understand the deduction with some examples –

Example 1

A man buys a life insurance policy for his wife on 1st January 2020. The death sum assured is Rs.10 lakhs, and the premium is Rs.50,000, payable for 10 years.
 

Tax benefit –

Rs.50,000 would be allowed as a deduction from the man’s taxable income because the premium of Rs.50,000 is within 10% of the death sum assured, which is Rs.1 lakh.

Example 2

A man buys a life insurance policy for his father on 1st February 2019. The death sum assured is Rs.10 lakhs, and the premium is Rs.1 lakh.
 

Tax benefit –

10% of the death sum assured is Rs.1 lakh. The premium is also Rs.1 lakh and so, can be qualified under the 10% rule. However, since the policy was bought for the father, the deduction under Section 80C of the Act would not apply.

Example 3

A man buys a policy for himself on 1st March 2021. He pays a single premium of Rs.2 lakhs for a death sum assured of Rs.10 lakhs.
 

Tax benefit –

The single premium is greater than 10% of the death sum assured. Thus, the man would not be able to claim the deduction on the entire amount of the premium. The deduction would be available only up to 10% of the death sum assured.
 

So, he can claim a deduction of Rs.1 lakh of the premium (10% of the death sum assured of Rs.10 lakhs is Rs.1 lakh) only.

Example 4

A man buys a life insurance policy on 1st January 2011. The premium is Rs.2 lakhs and the death sum assured is Rs.10 lakhs.
 

Tax benefit –

Since the policy was issued before 1st April 2012, a premium up to 20% of the death sum assured would qualify as a deduction. Since 20% of the death sum assured of Rs.10 lakhs is Rs.2 lakhs and the premium is also Rs.2 lakhs, the man is technically allowed to claim a deduction on the entire amount of the premium.
 

However, Section 80C allows a maximum deduction of Rs.1.5 lakh. So, the deduction would be available only on Rs.1.5 lakhs.

Example 5

A man buys a life insurance policy for his son suffering from aphasia. He bought the policy on 1st April 2015 and paid a premium of Rs.1.5 lakhs. The death sum insured is Rs.10 lakhs.
 

Tax benefit –

The man buys the policy for his son, which is allowed under Section 80C of the Act. The son is also suffering from a disease specified under Section 80DDB. Since the policy was bought after 1st April 2013, a premium of up to 15% of the death sum assured can be claimed as a deduction.
 

In this case, the premium is 15% of the death sum assured (Rs.1.5 lakhs is 15% of Rs.10 lakhs). So, the policyholder can claim a deduction on the entire premium of Rs.1.5 lakhs.

Close Button

This section is solely applicable for life insurance pension plans. If you buy a deferred annuity policy, i.e. a pension plan wherein annuity payments do not start immediately, you get a tax benefit on the premium amount.

 

Premium paid for such policies qualifies for a deduction under this section. The rules for claiming the deduction are the same as the rules for Section 80C. The maximum amount of deduction available is Rs.1.5 lakhs which includes the deduction available under Section 80C of the Act. 

For example, say you buy two life insurance plans. One is a Unit Linked Insurance Plan(ULIP) wherein you pay a premium of Rs.1 lakh, and another is a pension plan wherein you also pay a premium of Rs.1 lakh. In this case, the deduction would be as follows –

  • Rs.1 lakh for ULIP premium under Section 80C
  • Rs.1 lakh for pension plan premium under Section 80CCC

However, the maximum deduction allowed is Rs.1.5 lakhs. So, you could claim a deduction up to an amount of Rs.1.5 lakhs only. You can get a tax deduction of Rs.1 lakh under Section 80C and Rs.50,000 under Section 80CCC. Alternatively, you can get a tax deduction of Rs.50,000 under Section 80C and Rs.1 lakh under Section 80CCC.

This section does not allow any deduction. It simply states that the deduction available under Section 80C, 80CCC and 80CCD(1) of the Act cannot exceed Rs.1.5 lakhs. 

Deduction under Section 80D of the Act is allowed for premiums paid towards health insurance policies. So, the deduction is available in the following instances –

  • If you buy a health insurance policy from a life insurance company
  • If you choose a rider with your base policy that provides health insurance coverage. Common examples of the rider include critical illness rider, surgical rider, terminal illness rider, etc.

You can also pay the premium for your family and claim a deduction under this section. The limit of deduction is as follows –

  • For people less than 60 years of age, it is up to an amount of Rs.25,000 per financial year.
  • For people more than or equal to 60 years of age, the limit is up to an amount of Rs 50,000 per financial year.

Moreover, in case you are paying the health insurance premium for your dependent parents as well, you can get an additional amount of tax deduction under section 80D of the Act for the premium paid. Even for this deduction, the limit would be as follows:

 

  • If both of your parents happen to be less than 60 years of age, you get a tax deduction upto an amount of Rs 25,000 for premium payment for their health insurance policy.
  • However, if one or both of them are 60 years or more, then you get a tax deduction up to an amount of Rs 50,000 for premium payment for their health insurance policy.
  • Below is the summary of deductions available under Section 80D:

 

ParticularsFamily Amount (Rs)Parents Amount (Rs)

General deduction

25,000

25,000

Additional deduction, If anyone is Senior citizen

25,000

25,000

Maximum deduction available

50,000

50,000

Example 1

Suppose you are 35 years of age, and you buy a life insurance policy and pay a premium of Rs.90,000. You also buy the critical illness rider for which you pay a premium of Rs.5000. The death sum insured is Rs.10 lakhs.

Tax benefit –

  • -Premium of Rs.90,000 is within 10% of the death sum insured of Rs.10 lakhs. So, deduction under Section 80C would be allowed. A deduction of Rs.90,000 would be allowed under Section 80C.
  • -The premium paid for the rider would be allowed under Section 80D. So, the premium of Rs.5000 would be deducted under Section 80D.

Example 2

You buy a health insurance policy for yourself, aged 35 years. You pay a premium of Rs.20,000. You also buy a health plan for your father, aged 62 years. The premium for the same is Rs.30,000.

 

Tax benefit –

  • For the premium that you paid for yourself, the deduction is available up to an amount of Rs.25,000. Thus, your premium of Rs.20,000 would be eligible for deduction under Section 80D.
  • For the premium paid for your father, the deduction is available up to an amount of Rs.50,000 since your father is a senior citizen aged 60 years and above. So, the premium of Rs.30,000 paid for your father would also qualify as a tax deduction under Section 80D.
  • The total deduction that you can apply under Section 80D is, thus, Rs.50,000

Close Button

Deduction under Section 80DD is available if you have a dependent who is differently abled and is financially dependent on you completely. If you buy a life insurance policy for such a dependent, the premium that you pay for the same can be claimed as a tax deduction under this section.

The conditions to avail of the deduction are as follows –

  • The deduction is available to an individual or a Hindu Undivided Family (HUF)

  • You should not have claimed a deduction under the Section 80U of the Act

  • The dependent can be your spouse, children or siblings

  • The disability should be 40% and above

  • The disability should be defined under Section 2(i) of the Persons of Disabilities Act, 1995

A flat deduction of Rs.75,000 is allowed if the disability is between 40% and 80% and Rs.1.25 lakhs if the disability is more than 80%.

Exemptions

Exemptions are allowed under the Act for the benefits that you receive from a life insurance policy. The exemptions that you can get are as follows –

  • Exemption under Section 10(10A) of the Act

  • Exemption under Section 10(10D) the Act

The conditions for tax exemption in respect of commuted pension in case of a non-Government employee are as follows –


  • If the employee receives gratuity, one-third of the full value of commuted pension is allowed as an exemption
  • If the employee does not receive any gratuity, half of the of full value of commuted pension is allowed as an exemption

Further exemption under Section 10(10A) is also available for the benefit received from a pension plan. On maturity of a deferred pension plan, if you commute a part of the total corpus, the commuted portion would be tax-free, subject to specified limits.

Example

You have invested in a pension plan whose corpus, on maturity, is Rs.10 lakhs. On maturity, you commute 50% of the total corpus and withdraw Rs.5 lakhs.
 

Tax benefits –

Tax benefits under Section 10(10A) would be allowed on 33.33% of the total corpus. So, you would be able to claim an exemption on Rs.3.33 lakhs. The remaining corpus of Rs.1.67 lakhs would be subject to tax.

Close Button

Benefits that you receive from a life insurance plan, including bonus is exempt from tax. Any amount that you receive would be eligible for exemption provided the following conditions are met –

  • In case the policy has been issued on or after 1st April 2012, the premium should not be greater than 10% of the death sum assured. However, in case the plan is issued before this date, the premium can be greater than 10% of the death sum assured but it should be within 20% of the death sum assured.
  • If the life insured has a disability as specified u/s 80U of the Act or suffers from a disease specified under the Section 80DDB the Act, and the plan is issued on or after 1st April 2013, premiums up to 15% of the death sum assured are allowed as a deduction.
  • In the case of ULIPs bought on or after 1st February 2021, the total maturity benefit will be tax-free if the aggregate annual premium is up to an amount of Rs.2.5 lakhs. If the premium exceeds Rs.2.5 lakhs, the gain from such policy will be taxable as capital gain. The tax would be applicable depending on the type of fund you invest in. It would be as follows –
  • In the case of equity ULIP, returns up to an amount of Rs.1.25 lakh would be tax-free. If the returns exceed Rs.1.25 lakh, the excess would be taxed at 12.5%.
  • In the case of debt ULIP, returns would be taxed @12.5%. No indexation benefit would be allowed on such returns.
  • A Securities Transaction Tax (STT) of 0.001% would also be applicable if you have invested in equity funds in your ULIP plan.
  • If you pay a top-up premium, the aggregate premium calculated for the taxation of maturity proceeds would include the top-up premium paid. If the top-up premium and the basic premium exceed Rs.2.5 lakhs in any of the year of policy, the gain from such policy will be taxable as capital gain.

However, the taxation of policies wherein the annual premium exceeds Rs.2.5 lakhs is applicable only on policies issued on or after 1st February 2021. If you have bought the policy before this date, the maturity benefit would be exempted even if the premium is more than Rs.2.5 lakhs provided policy is satisfying the criteria mentioned in Section 10(10D) of the Act.

Example 1

You buy an endowment plan on 1st January 2000. The death sum assured was Rs.10 lakhs, and the premium was Rs.50,000. On maturity, you get Rs.15 lakhs which includes a bonus of Rs.5 lakhs.
 

Tax benefit –

Since the premium is up to 20% of the death sum assured on the plan issued before 1st April 2012, the maturity benefit would qualify as an exemption. You would receive an exemption on the policy benefit ie Rs. 5 lakhs (Rs. 15 lakhs – Rs. 10 lakhs)

Example 2

You bought a ULIP on 1st July 2015. The death sum assured is Rs.20 lakhs and you pay a single premium of Rs.5 lakhs. The policy matures on 1st July 2022, and you receive a maturity benefit of Rs.8 lakhs.
 

Tax benefit –

The policy was issued on or after 1st April 2012. The premium is 25% of the death sum assured. Since the premium is greater than 10% of the death sum assured, the gain from policy will be taxable. Thus, you would have to pay tax on Rs.3 lakhs.

Example 3

You buy a ULIP and pay a premium of Rs.2 lakhs, every year for 5 years. The death sum assured is Rs.20 lakhs and the maturity benefit that you receive from the plan is Rs.25 lakhs.
 

Tax benefit –

In this case, on maturity gain from policy will be fully tax-free since the annual premium is up to an amount of Rs.2.5 lakhs and policy is satisfying Section 10(10D) criteria

Example 4

You buy a ULIP and pay a premium of Rs.2 lakhs post 1 Feb.2021. You buy another ULIP and pay a premium of Rs.1 lakh for that plan in addition to first ULIP bought after 1 Feb.2021. The tenure of both plans is 5 years. On maturity, you receive Rs.12 lakhs from the first plan and Rs.7 lakhs from the second. You invest in equity funds under both plans.


Tax benefit –

Policy holder is having choice of selecting policy to be treated as exempt. Assuming that policyholder has selected Policy 1 which is satisfying Section 10(10D) criteria. In the first policy, the premium amount is Rs.2 lakhs which is below the limit of Rs.2.5 lakhs. So, the first policy would enjoy exemption under Section 10(10D) of the Act. The maturity benefit of Rs.12 lakhs received from the first policy would thus, be fully exempt.


In the second policy, however, the aggregate premium exceeds Rs.2.5 lakhs since you pay a premium of Rs.1 lakh for the new policy and you have an existing policy with a premium of Rs.2 lakhs. As such, in the case of the second policy, the total maturity benefit will be taxable. The tax liability would be calculated as follows –


  • Premium paid throughout the policy tenure = Rs.1 lakh * 5 years = Rs.5 lakhs
  • Amount received on maturity = Rs.7 lakhs
  • Long term capital gain = Rs.7 lakhs – Rs.5 lakhs = Rs.2 lakhs
  • Returns exempt from tax = Rs.1.25 lakh
  • Taxable long term capital gain = Rs.2 lakhs – Rs.1.25 lakh = Rs.75 thousand
  • Tax payable = 12.5% on the excess returns = 12.5% of Rs.75000 = Rs.9,375.

Example 5

You buy a ULIP post 1 Feb. 2021 and pay a premium of Rs.2 lakhs annually. During the year, you pay a top-up premium of Rs.1 lakh under the plan. Thereafter, you pay a top-up premium of Rs.1 lakh every year. The term of the plan is 5 years after which you receive a maturity amount of Rs.20 lakhs. You had invested in the equity fund of the plan throughout the policy term.


Tax benefit –

  • Annual premium paid –Rs.2 lakhs
  • Amount of top-up premium paid – Rs.1 lakh
  • Total premium paid every year– Rs.3 lakhs
  • Total premium paid during the term – Rs.3 lakhs*5 = Rs.15 lakhs
  • Maturity benefit received – Rs.20 lakhs
  • Long term capital gain = Rs.5 lakhs
  • Type of fund selected – equity
  • Taxation – Returns up to an amount of Rs.1.25 lakh would be tax-free.
  • Excess return of Rs.3.75 lakhs would be taxed at 12. 50%
  • Tax liability = 12. 50% of Rs.3.75 lakhs = Rs.46,875

Example 6

You buy a ULIP on 1st January 2021 and pay a premium of Rs.3 lakhs for a death sum assured of Rs.30 lakhs. You buy another ULIP on 1st March 2021 and pay a premium of Rs.2 lakhs for a sum assured of Rs.20 lakhs. In July 2021, you buy another policy for which you pay a premium of Rs.1 lakh. The sum assured in the policy is Rs.10 lakhs.


The taxability, in this case, would be as follows -

 ULIP 1 bought on 1st January 2021ULIP 2 bought on 1st March 2021ULIP 3 bought on 1st July 2021

Premium

Rs.3 lakhs

Rs.2 lakhs

Rs.1 lakh

Sum assured

Rs.30 lakhs

Rs.20 lakhs

Rs.10 lakhs

Exemption under Section 10(10D)

Allowed. The maturity benefit would be fully exempted even though the annual premium is more than Rs.2.5 lakhs since the policy was issued before 1st February 2021.

Allowed. The maturity benefit received from the policy would be fully exempted because the annual premium is below Rs.2.5 lakhs.

Not allowed. The aggregate annual premium of ULIP 2 and ULIP 3 crosses Rs.2.5 lakhs. As such, the exemption would not be allowed. The net returns from the policy would be taxed as Capital Gains @12.5%.

 

Close Button

What Is TDS on a Life Insurance Policy?

The insurer is responsible for deducting TDS on life insurance policy payouts (if not exempt under Section 10(10D)) by the time the payout is settled. If the total payout is above ₹1 lakh, the insurer deducts TDS on the income (payout minus the total of premiums paid):

  • Current TDS rate (as of 1 Oct 2024): 2%, if the PAN number is provided.
  • No TDS if the policy is exempt from tax under Section 10(10D).
  • Pensions and annuity payouts are normally not subject to this TDS.
  • Example 1
  • Example 2
Example 1

 

Aman buys a life insurance policy of a death sum assured of Rs.10 lakhs and a term of 10 years. He bought the policy on 1st April 2013. He paid a premium of Rs.50,000 every year. On maturity, he received Rs.12 lakhs. 

 

Tax treatment –

  • 10% of the death sum assured = 10% of Rs.10 lakhs = Rs.1 lakh
  • Premium paid = Rs.50,000 per annum
  • Since the premium is up to 10% of the death sum assured, the maturity benefit would qualify for an exemption under Section 10(10D)
  • TDS on the policy – nil since the maturity benefit is exempted under Section 10(10D).
Example 2

 

Rahul buys a life insurance policy on 1st July 2012. The sum assured is Rs.10 lakhs, and the premium is Rs.1.25 lakhs per annum. The term of the plan is 8 years. On maturity, he receives Rs.12 lakhs which also includes a bonus.

 

Tax treatment –

  • 10% of the death sum assured = 10% of Rs.10 lakhs = Rs.1 lakh
  • Premium = Rs.1.25 lakhs per annum
  • Date of buying the policy – 1st July 2012)
  • Since the premium is greater than 10% of the death sum assured, the maturity benefit is not exempted from tax under Section 10(10D).
  • Maturity benefit is Rs.12 lakhs
  • TDS applicable – 5% TDS on the net returns
  • Net returns = maturity benefit – aggregate premium paid = 12 lakhs – (Rs.1.25*8) = Rs.12 lakhs – Rs.10 lakhs = Rs.2 lakhs
  • TDS applicable = 5% of Rs.2 lakhs assuming PAN card has been submitted = Rs.10,000

Rahul would, thus, get a benefit of Rs.11.9 lakhs after deducting a TDS of Rs.10,000 from the maturity benefits.

Tax Liability of Single Premium Policies

Single premium policies are also treated as regular or limited premium policies when it comes to taxation. The tax benefits are as follows –

  • Premiums qualify for a deduction under Section 80C up to an amount of Rs.1.5 lakhs. The conditions of Section 80C should be fulfilled to claim this deduction
  • The death benefit is always tax-free
  • The maturity benefit is exempted from tax under Section 10(10D) if the conditions of the section are fulfilled.
  • If the maturity benefit is not exempted from tax under Section 10(10D), TDS on the maturity proceeds would apply as per provisions of Section 194DA of the Act.
  • In the case of ULIPs, if the aggregate annual premium from all ULIP plans which are issued on or after 1 Feb 2021 exceeds Rs.2.5 lakhs, the maturity proceeds would attract tax. The returns would attract capital gain tax depending on which fund the premium was invested in.
 

Life Insurance Guide

  • Articles

  • Calculators

  • Videos

Search Symbol
Single Premium Life Insurance Tax Benefits

Single Premium Life Insurance Tax Benefits

A single premium life insurance policy is a type of life insurance plan wherein the policyholder pays the premium as a lump sum at the time of policy purchase instead of regular

Life Insurance Tax Benefits Under Section 80C & 10D

Life Insurance Tax Benefits Under Section 80C & 10D

A contract between you and an insurance provider is known as life insurance. In exchange for your premium payments, the insurance company will pay your nominees

Taxability of Life Insurance Policy Payouts

Taxability of Life Insurance Policy Payouts

A life insurance policy has several benefits. It gives financial security against premature death, helps you plan for your and your family’s financial goals, helps

5 Popular Tax-Saving Schemes in India

5 Popular Tax-Saving Schemes in India

The majority of Indians view filing of income tax return as tedious. To be sure, no one likes tax cuts from salaries and other earnings.

Child Education Planning Tool

A simple to use and comprehensive tool to plan for your child's education.

Term Insurance Calculator

An easy to use Term Insurance calculator to determine the right life cover amount as per your needs.

Savings to Life Goals Convertor

Use this calculator to know how savings from regular expenses can help you achieve your Life Goals.

Financial Fitness Calculator

Get to know your Financial Fitness Score by answering few simple questions.

Immunity Score Calculator

Use our immunity calculator to find out your immunity score in just a few clicks!

ULIP Calculator

Know the amount to invest today to have the corpus to accomplish your Life Goals tomorrow.

Power of Compounding Calculator

Get an estimate of how much your investment will grow over a period of time.

Income Tax Calculator

Know your income tax based on the taxable income and explore Life Insurance plans to save more tax.

Child Plan Calculator

A simple to use calculator that helps you plan for fulfilling your Child's Life Goals.

Retirement Calculator

Calculate the amount you need to invest today to accomplish your retirement life goals.

Investment Calculator

Answer a few simple questions to know estimated corpus you will have to fulfil your Life Goals.

Body Mass Index (BMI) Calculator

Body Mass Index (BMI) is a measure to understand whether your body weight is healthy as per your height.

Life Insurance Made Easy | Death Benefit

Understanding Death Benefit: How It Impacts Your Coverage

Life Insurance Made Easy | Life Assured

Cracking the Code: Understanding Life Assured in Insurance

Life Insurance Made Easy | Policy Admin Charges

Explore the management of life insurance processes with Policy Administration Charge in this video

Life Insurance Made Easy | Endowment

Wondering about combining life insurance and long-term savings? Explore Endowment Plan benefits and suitability here

Life Insurance Made Easy | Waiver of Premium

Discover how the waiver of premium provision can protect you from financial burdens in times of Death, critical illness or disability

Life Insurance Made Easy | Solvency Ratio

Discover the importance of solvency ratio for insurance companies and its implications in this insightful video

Close Button

Customer Reviews

Customer Rating
4.7
4.7
Reviews by 4652 customers
Rate & Review

(Rate your experience on the website)

Please select the rating to proceed

Close Icon

Tell us how was your experience ?

1. Easily found what I needed

2. Information provided are clear and easy to understand

3. Look and feel of the website is attractive

4. Easy to download all relevant documents

5. User friendly website

6. Write Your Review

500 characters remaining
I agree and consent to the Terms & Conditions, Privacy Policy
×

Terms & Conditions

I hereby authorize Bajaj Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

Please refer to BALIC Privacy Policy

Checked Thanks Icon

Thank You.

Your review has been submitted successfully.

Go Back
Bajaj Life Insurance Security
Bajaj Life Insurance is a trusted insurance partner Reviewed by Life Insurance Experts
Bajaj Life Insurance is a trusted insurance partner

At Bajaj Life Insurance, we are here to support you in building a secure and worry-free financial future. With over 24 years of experience, we provide a variety of life insurance plans, including protection, retirement, savings, investment and health, to meet your unique needs.

Disclaimers:
Plus Symbol
Minus Symbol

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

Risk Factors and Warning Statements: Bajaj Life Insurance Limited and Bajaj Life Insurance Smart Protect Goal, Bajaj Life Insurance Goal Assure, Bajaj Life Insurance Flexi Income Goal - Income Benefit, Bajaj Life Insurance Flexi Income Goal - Enhanced Benefit, Bajaj Life Insurance Health Care Goal, Bajaj Life Insurance Guaranteed Pension Goal, Bajaj Life Assured Wealth Goal – Step Up Income  are the names of the company and the products respectively and do not in any way indicate the quality of the product and its future prospects or returns. Unlike traditional products, Bajaj Life Insurance Goal Assure is a Unit Linked Insurance Plan (ULIP). Investment in ULIPs is subject to risks associated with the capital markets. The policyholder is solely responsible for his/her decisions while investing in ULIPs. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajlifeinsurance.com) carefully before concluding a sale.  Regd. Office Address: Bajaj Insurance House, Airport Road, Yerawada, Pune – 411006. IRDAI Reg. No.: 116.| CIN : U66010PN2001PLC015959 | Mail us : customercare@bajajlife.com | Call on : Customer Care Number 020-6712 1212

Bajaj Life Smart Protection Goal - A Non Linked, Non Participating, Individual Life Insurance Term Plan-(UIN: 116N174V04),

Bajaj Life Insurance Goal Assure II - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L180V02)

Bajaj Life Insurance Flexi Income Goal - Income Benefit - A Non Linked, Participating, Guaranteed Income Life Insurance Plan(UIN: 116N162V02),

Bajaj Life Insurance Flexi Income Goal – Enhanced Benefit, - A Non Linked, Participating, Guaranteed Income Life Insurance Plan(UIN: 116N162V02),

Bajaj Life Guaranteed Pension Goal II - A Non-Linked, Non- Participating, Deferred & Immediate Annuity plan  (UIN -116N187V01)

Bajaj Life Assured Wealth Goal - A Non linked, Non Participating, Individual, Life Insurance Savings Plan - (UIN: 116N170V12)

The Logo of Bajaj Life Insurance Limited is provided on the basis of license given by Bajaj Finserv Ltd. to use its “Bajaj” Logo. All charges/ taxes, as applicable, will be borne by the Policyholder.

BJAZ-WP-ECNF-16631/25

X
Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

Bajaj Life Insurance Limited (Formerly known as Bajaj Allianz Life Insurance Company Limited) | IRDAI Reg no. 116

X
Terms & Conditions

I hereby authorize Bajaj Life Insurance Limited. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

X
Disclaimer

Bajaj Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Life Insurance Limited (Formerly known as Bajaj Allianz Life Insurance Company Limited) | IRDAI Reg no. 116


X
Terms & Conditions

I hereby authorize Bajaj Life Insurance Limited. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

X
Disclaimer

35% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

^Above illustration is for Bajaj Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V03) considering Male aged 25 years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | Indian Resident | 1st Year Premium is Rs. 5,118. 2nd Year onwards premium Rs. 5,548. Total Premium Rs. 1,66,010 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajlifeinsurance.com ) or consult your "Insurance Consultant' for more details and eligibility conditions carefully before concluding a sale.

Sticky

18% 0% GST Now!*

Check Mark

Lowest Premium Guaranteed^

Check Mark

16% Discount on first year premium#

close

18% 0% GST Now!*

Lowest Premium Guaranteed^

16% Discount on first year premium#

Are you an NRI?

Select Country
  • australia-flag Australia
  • austia-flag Austria
  • belgium-flag Belgium
  • canada-flag Canada
  • Czech-republic Czech Republic
  • denmark-flag Denmark
  • england-flag England
  • finland-flag Finland
  • france-flag France
  • germany-flag Germany
  • greece-flag Greece
  • greenland-denmark Greenland (Denmark)
  • holland-flag Holland
  • hong-kong-flag Hong Kong
  • hungary-flag Hungary
  • iceland-flag Iceland
  • ireland-flag Ireland
  • italy-flag Italy
  • japan-flag Japan
  • kingdom-of-bahrain Kingdom of Bahrain
  • kuwait-flag Kuwait
  • luxemburg-flag Luxembourg
  • mauritius-flag Mauritius
  • netherland-flag Netherlands
  • new-zealand-flag New Zealand
  • netherland-flag Northern Ireland (UK)
  • norway-flag Norway
  • oman-flag Oman
  • poland-flag Poland
  • portugal-flag Portugal
  • qatar-flag Qatar
  • romania-flag Romania
  • saudi-arabia Saudi Arabia
  • scotland-flag Scotland
  • singapore-flag Singapore
  • slovania-flag Slovenia
  • Flag_of_South_Korea.svg South Korea
  • Flag_of_Spain Spain
  • Flag_of_Sweden Sweden
  • Flag_of_Switzerland.svg Switzerland
  • Flag_of_the_United_Arab_Emirates.svg United Arab Emirates
  • Flag_of_the_United_Kingdom United Kingdom
  • Flag_of_the_United_States USA
  • vatican-fag Vatican City
  • wales-UK Wales (UK)

I agree and consent to the Terms & Conditions, Privacy Policy

*,#,^T&C Apply

Gender

Tobacco/Nicotine

Are you diabetic?

I agree and consent to the Terms & Conditions, Privacy Policy

*,#,^T&C Apply

Close button

Thank you for sharing your details. Our executive will get in touch with you shortly!

X
Disclaimer

*In view of the Government of India’s announcement to exempt life insurance policies from GST with effect from 22nd September 2025, customers have the option to request issuance of the policy on or after 22nd September 2025, subject to satisfactory completion of underwriting requirements. Accordingly, GST will not be applicable subject to final notification from the Government

#5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

 

^The Premium prices mentioned are the lowest available across all online channels/ platforms for the purchase of this specific version of the product. These rates are subject to in-put parameters7 as required for policy issuance remaining consistent during comparison. No Staff/Partner discount&& can be availed with this product. If a lower premium rate is found elsewhere, under the same conditions mentioned above, the policyholder may choose to cancel their policy and receive a full refund of the premium paid8 during the applicable free-look period. &&Staff includes directors and employees of Bajaj Finserv Group & their spouse, children, and dependent parents. Partner includes employees and agents of intermediaries and their family members. 7Input parameters include age, medical details, qualifications, occupation, income and other factors required for policy issuance. 8Subject to submission of satisfactory documentary proof by the customer. Decision of Bajaj Life Insurance regarding the validity of the above claim shall be final and binding on the Customer.

X
Terms & Conditions

I hereby authorize Bajaj Life Insurance Limited. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

X
Disclaimer

*Premium revision is applicable throughout the policy term, premium payment term and sum assured combinations.

^The Premium prices listed above are the lowest available across all online channels/ platforms for the purchase of this specific version of the product. These rates are subject to input parameters& as required for policy issuance remaining consistent during comparison. No Staff/Partner discount&& can be availed with this product. If a lower premium rate is found elsewhere, under the same conditions mentioned above, the policyholder may choose to cancel their policy and receive a full refund of premium paid.&& Staff includes directors and employees of Bajaj Finserv Group & their spouse, children, and dependent parents. Partner includes employees and agents of intermediaries and their family members. &Input parameters include age, medical details, qualifications, occupation, income and other factors required for policy issuance

#5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

© Copyright 2025. Bajaj Life Insurance Limited. All Rights Reserved.
BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS / FRAUDULENT OFFERS
IRDAI or its officials do not involve in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
IRDAI Public Notice on Spurious calls
Fraud Prevention Tips
Fraud Awareness Booklet
Bajaj Life Insurance Limited (Formerly known as Bajaj Allianz Life Insurance Company Limited). All Rights Reserved. | IRDAI Reg. No. 116 | An ISO 27001:2013 Certified IT Department
Contact Us

Sales: 022 6124 1800 | Service: 020 6712 1212

Email: customercare@bajajlife.com

Registered Office Address

Bajaj Insurance House, Airport Road, 

Yerwada, Pune, Maharashtra - 411006

Download Mobile App
Follow Us On
Life Insurance Plans
Tools & Calculators
Insurance Coverage Plans
Insurance for All
Affordable Term Plans
Policy Term Plans
Insurance Guide for Women
NRI Plans - Canada
NRI Plans - Singapore
NRI Plans - Saudi Arabia
NRI Plans - UAE
NRI Plans - United States
NRI Plans - Oman
NRI Plans - Qatar
NRI Plans - Kuwait
NRI Plans - Australia
NRI Plans - UK
Know More
Customer Service
Life Insurance Guide
Customer Support
Announcements
Distribution Channels List
Tools & Support

© Bajaj Life Insurance Limited (Formerly known as Bajaj Allianz Life Insurance Company Limited). All Rights Reserved. | IRDAI Reg. No. 116 | An ISO 27001:2013 Certified IT Department

CIN: U66010PN2001PLC015959 | Registered Office Address: Bajaj Insurance House, Airport Road, Yerawada, Pune - 411006, Maharashtra

Email: customercare@bajajlife.com | Customer Care No.: 020 6712 1212

Disclaimer: Images used on this website and the models photographed in them are for representative purposes only and are not indicative of anyone's personal thoughts or ideas.

The Logo of Bajaj Life Insurance Limited is provided on the basis of license given by Bajaj Finserv Ltd. to use its “Bajaj” Logo.

Website Compatible Browsers: IE11, Firefox, Safari, Opera, Chrome

Disclaimer

For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. The terms and conditions of product/plan as contained in the Policy Document issued by the Company is available on the Web Site. The names of the Company, Products/Plans/funds do not indicate the quality and its future prospects or returns. IN ULIPs, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. Tax benefits are as per the prevailing Income Tax Laws including the Income Tax Act, 1961 and are subject to change from time to time. Goods and Services Tax will have to be borne by the Policyholder as per applicable rates. All other charges shall be levied in accordance with the terms and conditions of the policy.

This calculation and results displayed are based on information provided and certain assumptions about the rates of return. It is for assistance only and does not constitute an offer or solicitation. It is not intended to be and must not alone be taken as the basis for an investment decision. Kindly note that the returns are only illustrative and they are not guaranteed. The returns do not indicate the upper or lower limits of the return that you may get with your policy and the value is dependent on a number of factors including future performance. Bajaj Life Insurance Limited shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information reported by the calculator.

1©2021 Morningstar. All Rights Reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. The information, data, analyses and opinions ("Information") contained herein: (1) include the proprietary information of Morningstar and its content providers; (2) may not be copied or redistributed except as specifically authorized; (3) do not constitute investment advice; (4) are provided solely for informational purposes; (5) are not warranted to be complete, accurate or timely; and (6) may be drawn from fund data published on various dates and procured from various sources. Morningstar, its affiliates, and its officers, directors and employees shall not be liable for any trading decision, damage or any other loss arising from using the Information. Please verify all of the Information before using it and do not make any investment decision, except upon the advice of a professional financial adviser. Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up

Disclaimer
close
Ask for an Agent
Sign up for personal visit and tailored advice from our expert agents

Claim Settlement Ratio of 99.29%~