What is the Income Tax Advantage of Personal Accident Insurance?

Wage earners and Self-employed persons may deduct 50% of the premiums paid for their and their spouses’ and minor children’s permanent life insurance policies and all premiums paid for other life insurance policies such as death, accident, health, illness, disability, unemployment, maternity, birth and training, etc. from their taxable incomes.

Wage earners: As per Clause 1(3) of Article 63 of the Income Tax Law, effective January 1, 2013, premiums paid for personal insurances (excluding private pensions) may be deducted from the taxable income (up to 15% of the pay received) when calculating the taxable wage base.

Tax payers subject to return filing: As per Clause 1(1) of Article 89 of the Income Tax Law, effective January 1, 2013, premiums paid for personal insurances (excluding private pensions) may be deducted from the taxable income (up to 15% of the pay received) in the annual income tax returns filed. Amounts shown on the annual income tax returns before taking any deductions and prior year losses will represent the declared income tax.