80-CCC and surrender of pension policy

This query is : Resolved

sivasankar (Querist)
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19 November 2007
CASE: My client has invested a sum of Rs. 24 lakhs in LIC’s MARKET PLUS PENSION POLICY in the Current Year 2007-2008 and out of that Rs. 24 lakhs, he is eligible to get maximum income-tax relief only on Rs. 1 lakh under section 80CCC.

QUERIES: If the above pension policy is surrendered wholly after the lockin period of three years, what will be the income-tax implication?

i) Whether the entire amount received on surrender is subject to tax? Or the surplus amount over the investment is only taxable?

ii) If the investment amount (subject to maximum of Rs.1 lakh) is not at all used to claim deduction under section 80CCC at the time of investment year, what will be the income-tax implication at the time of surrender wholly?
(Section 80CCC reveals that the surrender amount will be subject to income-tax liability only if the deduction is claimed and allowed).

Jitender

Jitender (Expert)
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30 September 2008 amount claimed earlier will be chargeable to tax & sale of units will also be chargeable to capital gain tax subject to sec 10(38) & 112.