The father who purchases this LIC policy can claim tax benefits as applicable.
There are no tax implications for the maturity amount, at least as of now.
LIC maturity tax implications on gift by father to daughter
My father would like to buy a lic policy for 10lacs in his daughter's name. Single premium policy for term 10years. What will be the tax implication for father and daughter , for investment and on maturity?
Asked 4 years ago in Taxation
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5 Answers
Life insurance policies can be used as tax planning tool as premium paid on Insurance Policies is eligible for tax benefits under Section 80C of the Income Tax Act 1961 (Act) and Maturity Proceeds are also eligible for exemption under section Section 10(10D) and Section 10(10A)(iii).
Depends on policy. It will have tax implications if not covered under 80C. The premium will be Exempted and will enjoy deduction under 80 c if not exceeds 15 percent of SA
Dear Sir/ Ma'am,
According to the income tax rules, for all life insurance policies issued after April 1, 2012, if the premium amount paid in a financial year is not more than 10% of the sum assured, the maturity proceeds are exempted from tax. The rule applies to single premium insurance policies too.
Thank You.
- There is not tax at the time of taking the LIC policy in the name of daughter , and father can even get tax exemption of his income tax under section 80C of the Income Tax Act.
- Further the Maturity amount is also exempted from tax .
