16 December 2014
I have received Rs. 9,00,000/- against a single premium LIC policy premium of Rs.5 lacs. Whether I willhave to payt tax on Rs. 9lacs or Rs. 5 lacs. Section 10(10D) talks about any sum receivedwhose premium is more than 1/10th of sum received is taxable. What will be taxabilty?
17 December 2014
Sum assured is 9 lakhs. Premium paid is 5 lakhs. Since premium paid is more than 90,000(10% of the sum assured), section 10(10D) doesn't apply meaning thereby 9 lakhs received is taxable.