5 reason why insurance would not save tax

Five Reasons why Insurance would not Save Tax

1)No deduction: Under DTC, an insurance policy that offers a cover of less than 20 times

the annual premium won’t be eligible for tax deduction.

2)Tax on maturity: If the 20 times life cover condition is not met, even the income accruing

from the policy will be taxable.

3)Lower limit: The tax deduction limit for life insurance will be reduced from the present ` 1 lakh to ` 50,000 a year.

4)Tax on withdrawals: Partial withdrawals from an insurance plan before maturity will be taxable under DTC.

5)Tax on surrendering: The surrender value of a plan will also be taxable.