Forget Life Insurance Premium Declaration During Tax Filing

2025-07-14

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Forgetting to declare your life insurance premiums in income tax e-filing can lead to missed tax benefits and a higher tax burden. However, the good news is that you can still rectify this mistake. By filing a revised return, submitting a rectification request, or ensuring proper declarations in the next financial year, you can reclaim your deductions. Let’s explore the impact of this oversight and the steps you can take to maximise your tax savings effectively.

Key Takeaways

Not declaring life insurance premiums leads to a higher tax burden and missed deductions.
You can rectify the mistake by filing a revised return before the assessment year ends.
Keeping proper records can help track tax benefits effectively.
Filing a rectification request under Section 154 may help recover missed deductions.
Consulting a tax advisor can ensure optimal personal finance management and tax planning.

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Impact of Not Declaring Life Insurance Premiums in E-Tax Filings

Failing to declare life insurance premiums in your e-tax filings can lead to missed opportunities for tax benefits and potential legal consequences, affecting your overall tax planning strategy.

Loss of Eligible Tax Benefits: Life insurance premiums are eligible for tax deductions up to ₹1.5 lakh per annum under 80C of the Income Tax Act. Not declaring premiums might lead to higher taxable income. Additionally, if you are investing in a Unit-Linked Insurance Plan (ULIP), you might lose the long-term tax benefits under Section 10(10D).
Higher Taxable Liability: Without these deductions, your taxable income remains higher. This increased tax burden can significantly impact your disposable income and long-term savings. Let's understand with the help of an example:
If your income falls under the 20% tax bracket and you fail to declare deductions under ₹1.5 lakh, then you could end up paying ₹30,000 more in taxes than required. This extra amount can be utilised for other financial goals such as emergency funds or child education planning.
IT Department Scrutiny : If you forget to declare your life insurance premiums and try to claim the tax benefit later, the Income Tax Department may scrutinise your revised filing. They could request:
- Premium payment receipts
- Bank statements showing the transaction
- Policy documents

If the claim appears suspicious, it might trigger further verification or assessment. To avoid this, ensure all tax deductions are declared correctly in the first filing itself.

How To Fix the Issue?

You can fix the issue by considering the following points:

File a Revised Return (ITR) under Section 139(5): If you file a revised ITR on the income tax e-filing portal before 31 December, you still have the opportunity to claim your deductions and lower your tax liability. Taking action ensures you maximise your tax benefits.
Submit a Rectification Request under Section 154: Submit a rectification request under Section 154 through the tax portal. This allows you to correct errors and reclaim deductions. Once approved by the Income Tax Department, you can easily enjoy the financial benefits.
Declare in Next Year's Filing : Missed the deadline? No worries! You can still declare life insurance premiums in the next financial year. By staying proactive, you can continue to enjoy tax benefits and build a habit of accurate tax filing.
Consult a Tax Expert : If you're unsure how to correct your tax filing, seek help from a tax consultant. An expert can guide you through the best possible solutions, help file amendments correctly, and ensure compliance with tax laws to prevent penalties or future complications.

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Conclusion

Forgetting to declare life insurance premiums in income tax e-filing can lead to missed deductions and higher taxes. However, you can correct this mistake by filing a revised return or rectification request. Stay proactive, track tax benefits, and consult a tax expert for efficient tax planning.

Glossary

Income Tax E-Filing: The process of electronically submitting income tax returns to the government.
Tax Benefit: The reduction in tax liability due to eligible deductions or exemptions.
ULIP: It is a plan that offers dual benefits of investment and insurance.
Assessment Year: The year following the financial year in which income is assessed for tax purposes.
Emergency fund: It is a cash reserve that is utilised in uncertainties.

FAQs

Yes, you can file a revised return under Section 139(5) if the assessment year is not over.

You may miss out on tax savings and end up paying more tax than necessary.

If a revised return is filed on time, you can receive the eligible refund.

Yes, Unit-Linked Insurance Plans (ULIPs) are eligible for deductions under Section 80C.

Premium payment receipts and the insurance policy document serve as proof for claiming deductions.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.