LIC Tax Saving For Agent & Customer

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Let’s discuss Tax Today, The LIC Tax Saving Plans for Policy Holders, and some Tax saving tips for LIC Agents. See if you are a salaried person then you have no other choice but to save your Income Tax with the help of 80C and 80D is ₹2,00,000.

Similarly for LIC Agent commission under 194H Income Tax from Commission/Brokerage the Agent can save tax on Commission below ₹20,000/- and will have to pay 5% for onward income.

Before we consider any Tax Saving you should check the Old Tax Regime and new tax regime. When you avail any tax exemption you directly avail the old tax regime which was before March 2023.

Taxable Income SlabOLD Tax RegimeNew Tax Regime
₹0 – ₹2,50,0000%0%
₹2,50,000  – ₹3,00,0005%0%
₹3,00,000 – ₹5,00,0005%5%
₹5,00,000 – ₹6,00,00020%5%
₹6,00,000 – ₹7,50,00020%10%
₹7,50,000 – ₹9,00,00020%10%
₹9,00,000 – ₹10,00,00020%15%
₹10,00,000 – ₹12,00,00030%15%
₹12,00,000 – ₹12,50,00030%20%
₹12,50,000 – ₹15,00,00030%20%
>₹15,00,00030%30%

If you still don’t understand check the table representation by Cleartax.in here they have beautifully represented which tax regime is suitable for your Gross Income, have a look. Gross Income is the amount deposited in your Bank and Taxable income is (Gross Income – TaxDeductions)

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For those Gross Income individuals, if you see the ‘SAME’ option and you have not opted for any exemptions then you can go with the new Tax Regime, but if you have already invested in NPS, Insurance, or Home Loan then you can go with the OLD Tax regime till it is available.

LIC Tax Saving for Customers:

Under Income Tax section 80C you as a salaried person can save up to ₹1,50,000 by investing in LIC or another NPS Scheme. (Subject to certain conditions)

Under Income Tax Section 80D You can save on your Insurance policy premium paid for yourself, and your family members.

An additional Deduction for preventive health check-ups shall not exceed in aggregate ₹5,000/-

SRPolicy ForAmount Exemption
1You, Your Spouse/Children₹25,000
(Rs. 50,000 if the specified person is a senior citizen)
2Your Parents₹25000
(Rs. 50,000 if the specified person is a senior citizen)

So, if you consult with your CA you can save up to ₹2,00,000/- from your Salary Income for tax exemption with the help of LIC NPS and LIC Policies.

Well, one bonus news for you LIC HFL Also provide Housing Loan and you can save a Deduction of up to Rs. 50,000 towards Interest on the loan.

LIC Tax Saving for Agents:

Considering you are an Individual LIC Agent working part-time alongside your Salary Income P.A. of ₹3,50,000. Let’s discuss how you can save the tax on your current Salary income plus your LIC Commission Income.

You can use the same Tax Saving given above for your Salary Income, Here we will discuss saving on your Commission income.

You can exempt up to ₹20,000 for TAX Saving if your commission income (First Year + Renewal) per year is less than ₹60,000/- then you directly avail exemption of 50% on first-year commission and 15% on renewal commission.

Let’s Say you earned ₹59,500/- Commission this F.Y. from which ₹35000/- was the first-year commission and ₹25,500/- was the renewal commission earned.

So the total exemption is:

First year’s commission = ₹34,000/-

Deduction: 50% = ₹17,000/-

Renewal Commission = ₹25,500

Deduction: 15% = ₹3,825

Total Deduction = ₹17,000 + ₹3,825 = ₹20,825 but only ₹20,000 is allowed.

You can not exempt any other deduction like Your Telephone expense/rent/petrol from this final deduction.

So, now your Total Annual income will be ₹3,50,000 + (₹34,000 + ₹25,500 – ₹20,000 (deductions) = ₹39,500) = ₹3,89,500/-

According to the new tax regime, your income is less than the tax bracket so no tax on you. if you use the old tax regime you can avail of 80C and 80D exemptions as shown in LIC Tax Saving for Customers.

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2 Comments

  1. aniket Teflur says:

    This is what I need before the March ending in India. Great advice I would have not found a short info about Tax saving on Policy.