LIC Super Tax Saver Plan

7/28/2019 LIC Super Tax Saver Plan

1/13

Go ahead, let LIC sponsor yourSingapore Trip !

Presentation by:

Bhushan H Sheth


2/13

Why LIC?Investment in LIC policies is often compared to those of Fixed deposits,PPF and such other avenues.

It is important to note the trend of PPF in Indian history:1995

12%

2007 8%2027 ? Could be as low as 4%

Fixed Deposit: Current interest rate for 10Years are about 8% - which is

taxable. Tax net rate is below 6%. No guarantee for rates beyond 10Yrs.

Whereas, the valuation surplus of LIC has only grown since inception.Since LIC has no other stakeholders, all such surplus is distributed amongthe Policyholders.


3/13

Company Profile

Awarded The Most Trusted Consumer Brand for 5 consecutive years

LIC has a valuation surplus of Rs. 15,127 Crore. (This surplus is more than the paid up capital of

ICICI Prudential, HDFC Standard Life, Reliance Life and Bajaj Allianz Life put together!!)

- The Economic Times, 15th Sept, 2007

LIC tops claims settlement chart with 96.94% of reported claims being settled. While private

insurers settled only 72.7% of claims.

The Economic Times, 29th April, 2008

LIC holds more than 10% of the equity in various excellent companies including Corporation Bank,

Cipla, M&M, Maruti, MTNL, Tata Motors, HPCL, Ranbaxy Labs, Tata Steel, Reliance Infra, ITC, ACC

and L&T.

The Economic Times, 28th August, 2008

LIC has a life fund of 7 Lakh Crore with 23 Crore policies in force and is the only company that

enjoys Sovereign Guarantee of Govt. of India.


4/13

Section 80c of Income Tax Act

This section deals with investment avenues that an individual investor has.

The invested amount in the specified areas shall be deducted from grossincome, thus saving tax outgo on the same.

The total investible limit has been set to Rs.1Lac

The permissible investment includes Life Insurance premium amongothers

Medical insurance premium is NOT included in this section. It is under aseparate section 80d

Thus a person who is in the 30% tax slab, can effectively save Rs. 30,000 ofincome tax outgo, simply by investing Rs.1Lac in the optional avenues


5/13


6/13

Key Features

This is a 20 year scheme with 8 years ofINVESTMENT HOLIDAY and 4 years of reducedburden. Continuous payment only for first 4 years.

While your tax saving is automatically done for the entire period of 20 years. Thus, totaltax saved under sec 80c as a % of investment can be up to 77%.

You can deposit Monthly, Qly, Hly or Yly.

Maturity amount in LIC Scheme has a guaranteed portion and is Tax Free. Further, it isNOT unit/equity linked.

Get FREE INSURANCE plus accident benefit with LIC scheme for 30 years!!

Pay for 12, Save Tax for 20, Maturity after 20 and Covered for 30.

WHAT MORE CAN YOU NEED??


7/13

Comparison with a standard LIC plan

Standard Plan Tax Saver Plan

A 20-year plan requires premiumpayment in all 20 years

Same premium applicable for all20Yrs

Continuous premium for 20Yrs

Insurance cover is for 20Yrs

Max tax saving possible is as peryour tax slab

At age 35, a 10Lac policy will haveannual premium of Rs.50,000;thus total investment will be50000 x 20 = 10Lac

A 20-year plan requires premiumpayment for only 12 years

4yrs out of these 12yrs have muchlower premium

Regular breaks to ease liquidity

Insurance cover is for 30Yrs

Tax saving will be more than twiceyour tax slab

At age 35, a 10Lac policy will havepremium of Rs. 40,000 for 8 years.Total investment will be less thanRs. 4Lac


8/13

Find out how...


9/13

Not just Singapore, but Hong Kong,

Maldives and Bali too!!The cost of a luxurious trip for a COUPLE to Singapore and all such other places is Rs. 2 Lacs

To take best advantage of tax saving, you will have to invest Rs. 1 Lac anyway in

Life Insurance policy or any such other instrument

every year regularly to savetax.

In all other alternatives, you will invest Rs. 1Lac every year for 20 years, to saveyour tax outgo. Never will you be left with surplus to enjoy Four separate visits toSingapore. But in the Super Tax Saver, we give you four such trips for FREE.

You get 8 Years of Investment Holiday in this scheme. That is, for those 8 years, youneed not invest Rs. 1Lac, but your tax saving is still done.

There will be Four such 2-Year holiday blocks. The 2-year investment should havebeen Rs. 2Lacs, but in our scheme it will be ZERO. And you can easily use thisamount for your foreign tour.


10/13

Exiting? Here are the detailsfor a 35-year old person, who has to invest Rs. 1Lac to save tax

Year Investment Tax Saved

1 1,00,000 30,000

2 1,00,000 30,000

3 1,00,000 30,0004 1,00,000 30,000

5 27,500 30,000

6 30,000

7 30,000

8 1,00,000 30,000

9 27,500 30,000

10 30,000

11 30,000

Year Investment Tax Saved

12 1,00,000 30,000

13 27,500 30,000

14 30,00015 30,000

16 1,00,000 30,000

17 27,500 30,000

18 30,000

19 30,000

20 1,00,000 30,000

Total 9,10,000 6,00,000

% 65.93

No Investment:

Singapore Trip

No. 1

No Investment:

Hong Kong Trip

No. 2

No Investment:Bali Trip No. 4

No Investment:Maldives Trip

No. 3


11/13

Other Key Benefits

Insurance Cover:

Year 1 to 20: Rs. 25 Lacs

Year 21 to 30: Rs. 12.5 Lacs (FREE COVER)

Additional Accidental Death Benefit of Rs.25Lacs for initial20 Years

Disability Benefit included

Maturity Benefit: Guaranteed + Bonus =10,00,000 + 10,00,000 = Rs. 20,00,000

The only plan in which LIC and Income Tax Department seemto come together to sponsor your foreign tours, that toofour times !


12/13

LICs Tax Saving Scheme

Age Investment

Level

Total

Investment

Total Tax

Saved

Total Tax

Saved

Free

Insurance

Returns

25 50000 3,91,500 3,02,000 77% 14,00,000 10,00,000

25 100000 7,83,000 6,04,500 77% 28,00,000 20,00,000

30 50000 3,94,250 2,84,000 72% 12,50,000 10,00,000

30 100000 7,88,750 5,68,500 72% 25,00,000 20,00,000

35 50000 4,53,250 3,00,000 65% 12,50,000 10,00,000

35 100000 9,10,000 6,00,000 65% 25,00,000 20,00,000

40 50000 5,26,750 3,07,000 58% 11,00,000 10,00,000

40 100000 10,53,250 614,250 58% 22,00,000 20,00,000

Health wise premium may vary. Premium figures have been rounded off to the nearest thousand.

Ready Reckoner

The blue shaded row is the one used in earlier charts and examples.


13/13

LIC Super Tax Saver Plan

Documents

Transcript of LIC Super Tax Saver Plan