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Income Tax exemption on insurance policies: Different scenarios explained

With effect from April 1, assured sum received from insurance policies with premium of more than 5 lakh will not be exempt under income tax. 

But have you ever thought as to what would happen if a policyholder buys multiple policies? 

What if different insurance policies are bought in different years?

To answer all these queries, and more — the tax department has released a circular with further details regarding section (10D). 

The circular states that ULIPs are not to be covered under 5 lakh limit as they are already governed by the existing 2.5 lakh limit.


When a policyholder buys multiple policies during a year, s/he can take exemption for all of them so long as the total premium for these policies stays under 5 lakh.

The policy that tips the total premium beyond 5 lakh is not covered.

And policyholders can opt for a combination of policies that suit them. 


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tax exemption on insurance policies.

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 I-T department recently issued a circular that shared different details regarding the provision 10D of section 10 of I-T Act with regards to exemption against the income accrued from multiple insurance policies

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Income Tax exemption on insurance policies: Different scenarios explained

I-T department recently issued a circular that shared different details regarding the provision 10D of section 10 of I-T Act with regards to exemption against the income accrued from multiple insurance policies

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