Personal Accident Insurance Income Tax Advantages

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.

If you are an income tax payer, you may deduct the life insurance premiums you have paid for yourself, spouse and minor children from your taxable income in the ratios shown below.

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.