Income tax u/s 80c

Deduction can be claimed upto Rs 1,00,000 for life insurance premium.

But the amount of premium must not exceed 20% of the capital sum assured.

Hi,

There is a small updation. If insurance policy issued on or after 1st April 2012, the premium amount should not exceed 10% of the actual sum assured. For the policies issued before 1st april, it is 20%.

If the premium paid exceeds 20/10 % of the actual sum assured, only the amount of premium as does not exceed 20/10% will be qualfied for deduction.

Premium paid not in excess of 10 % of actual capital sum assured  is eligible for Section 80C provided if is less Rs One lac.

Further, read section 10(10D) for receipt of sum. Seems it will not be exempt on receipt of sum in case if premium is more than the 10% or 20% as case may be.