7 Habits, Tax Planners should Practice


Be Careful with Single-Premium Life Covers
Be Careful with Single-Premium Life Covers Few companies launching single-premium endowment plans are no good off late. Though these may look like the right option for you, make sure that the sum guaranteed is at least five times the annual premium or you may end up preceding certain tax benefits. Suresh Surana, founder, RSM Astute Consulting Group, said, "For instance, a single-premium policyholder would not be eligible to receive the sum as exempt under Section 10D except where the same is received by the legal heir in case of death of the policy holder. The amount of 20 percent cannot be calculated after netting off the amount of premium returned by the agent with regards to the policy sold. For the purpose of deduction under Section 80C in respect of the premium for such policies, the deduction is limited to 20 percent of the capital sum assured."