LIC Bima Lakshmi tax treatment

Tax treatment of Bima Lakshmi

Premium qualifies for §80C up to ₹1.5L per year, subject to the 10× SA rule. For Plan 881's typical configurations the 10× condition is generally satisfied for 30–45 year old buyers, but should be verified for short-term variants. Survival benefits paid during the policy term are tax-free under §10(10D) provided the original 10× condition is met at policy inception — each periodic payout retains its tax-free character. Maturity proceeds (residual SA + accrued bonuses + FAB) are tax-free under the same condition. Death benefits are tax-free under §10(10D) without conditions. Surrender proceeds: tax-free after 2 premium years; prior §80C deductions clawed back if surrendered earlier. From 22 September 2025, individual life insurance premiums attract 0% GST.

The 10× sum assured rule

For policies issued after 1 April 2012, both §80C deduction on premiums and §10(10D) exemption on maturity require the sum assured to be at least 10× the annual premium. Jeevan Labh's standard premium tables comfortably meet this — only watch out at very high entry ages where premium-to-SA ratios compress.

What changes from FY 2023-24

For non-ULIP life insurance policies issued on or after 1 April 2023 with annual premium above ₹5 lakh, maturity proceeds become taxable. Jeevan Labh premiums for typical sum-assured ranges (₹2 L–₹20 L) sit well below that threshold, so this rule rarely bites — but worth confirming for high-SA policies.