Surrender value of lic is exepmt from income tax ?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 November 2014 Dear Sir/Madam,
i want to know that LIC Surrender value is exempt from income tax? if not how much value shall be taxable in this case under IT act

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

20 November 2014 depends on how long you held on to the policy before surrender.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

20 November 2014 Amount received on surrender of Life insurance policy is exempt u/s 10(10D).

However deduction claimed u/s 80C in respect of premium paid on such policy shall be taxable in the following cases:

1. Terminates the policy within two years after the date of commencement of insurance, in case of any single premium policy.

2. Terminates the policy before premiums have been paid for two years in any other case.

3. Terminates a ULIP before 5 years

Upgrade to CAclubindia Pro. Subscribe Now!