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Hello Sir, I have question about dtc that 20 times of premium as sum asured will be there it means insurance policy for the 20 year long period and amount of premium is 5 % of the sum asured. is it right or wrong?

What happen if the amount of premium is more than 5 % but less than 50000 is it taxable under the DTC? like policy for Re. 500000 and premium is 8% that amount is 40000 is it taxable under DTC or not?

2 Answers

For tax exemption after direct tax code implementation on insurance policies, the annual premium paid for policy must be maximum 5% of the sum assured. There is no condition of minimum policy period of 20 years.

In case premium is more than 5% of sum assured, no exemption will be available.

For tax exemption after direct tax code implementation on insurance policies, the annual premium paid for policy must be maximum 5% of the sum assured. There is no condition of minimum policy period of 20 years.

In case premium is more than 5% of sum assured, no exemption will be available.

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