LIC Saral Pension tax treatment

Tax treatment of Saral Pension

Annuity income is taxable as 'income from other sources' at your marginal slab rate every year. There is no §10(10D) equivalent for annuity income. The purchase price paid qualifies for §80CCC deduction (within the ₹1.5L §80C ceiling) only in the year of payment — single-premium plans get the deduction once. On death, the return of purchase price is taxable in the nominee's hands as income in the year received. This is materially different from endowment maturity (typically tax-free under §10(10D)) — do not conflate the two.

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.