Insurance

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 When Proceeds from Insurance are exempt from Tax
give Conditions and reference???

CA. R. B. SAH

CA. R. B. SAH (Expert)
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24 December 2010 insurance should not be surrendered before 3 years.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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24 December 2010 it deffers from paln to plan

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Querist : Anonymous

Querist : Anonymous (Querist)

24 December 2010 Give Conditions , Plan Conditions

Vipin Kumar

Vipin Kumar (Expert)
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24 December 2010 Any insurance proceeds shall not be charged to tax in these cases:

If the such proceeds is In Kind i.e. if the insurance company has replaced your assets and the FMV of such asset is less than or equal to it's Value.

But if the assets replaced carry more than it's Value (normally in case of reinstated insurance) then exceeding value shall be charged to Capital Gains in the year the assets are received.

In case of Money Consideration:

It shall not be charged to Assets if you buy the assets in the same year as the

Assets Block will appear as below:

Opening Balance XXXXX
(1) Add: Assets Purchased XXX
(By insurance consideration)
(2) Less: Assets Sold XXX
(The WDV of assets destroyed)

Balance XXXX

But if the consideration is not used to buy the assets then it shall be charged to tax as income of the year in which such consideration recieved.