LIC Jeevan Labh tax treatment

Tax treatment of Jeevan Labh

Premiums up to ₹1.5 L per year qualify for §80C deduction provided the sum assured is at least 10× the annual premium (Jeevan Labh comfortably meets this — premium for ₹5 L SA is around ₹26,500). Maturity proceeds are tax-free under §10(10D) on the same 10× SA condition. Death benefits are always tax-free under §10(10D), no conditions attached. The tricky case: if you ever opt for a sum assured less than 10× premium (very unusual but possible at older entry ages), maturity becomes taxable as 'income from other sources' at slab rate. Surrender proceeds: tax-free if you've paid premiums for at least 2 years and held the policy for the minimum lock-in; otherwise prior 80C deductions get clawed back as taxable income in the surrender year.

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.