LIC New Endowment tax treatment

Tax treatment of New Endowment

Premium up to ₹1.5 L per year qualifies for §80C deduction subject to the 10% sum-assured rule (SA must be at least 10× annual premium for new policies after 2012; the 2024 Plan 714 has a 7× minimum death benefit floor which keeps this rule comfortably satisfied for typical buyers). Maturity proceeds are tax-free under §10(10D) on the same condition. Death benefits are always tax-free. Surrender proceeds: tax-free if you have paid premiums for at least 2 years; if you surrender earlier, prior §80C deductions are clawed back as taxable income in the surrender year. From 22 September 2025, individual life insurance premiums attract 0% GST (Notification 16/2025), so the headline premium is the all-in cost.

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.