Become a Govt. Certified GST Practitioner. Batch begins 18th Nov. Register Now!

Amount received on maturity of lic

Vineet Aggarwal (Article Assistant) (144 Points)

28 December 2011

Hello Friends i need your suggestion on this issue

Whether amount recd. on maturity on LIC is taxable or not?

Reply
Follow
Share

12 Replies

rakeshkuma (B.COM CA FINAL) (43 Points)
Replied 28 December 2011

if the amount received from LIC before 5 years (i.e. pre-withdraw) , it is taxable.

otherwise not.

Upgrade to CAclubindia Pro. Subscribe Now!

CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 28 December 2011

Dear Vineet,

The answer is NO it is not taxable under income tax.

It is exempt u/s10 (10D)

Under the provisions of section 10(10D) of the Income-tax Act, 1961, Maturity/Death claims proceeds of life insurance policy, including the sum allocated by way of bonus on such policy is exempted from income-tax. However any sum (not including the premium paid by the assessee) received under an insurance policy issued on or after the 1st day of April, 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20% of the actual capital sum assured will no longer be exempted under this section.

1 Like

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 29 December 2011

Originally posted by : RAJESH CHOUDHARY
	Dear Vineet, The answer is NO it is not taxable under income tax. It is exempt u/s10 (10D) Under the provisions of section 10(10D) of the Income-tax Act, 1961, Maturity/Death claims proceeds of life insurance policy, including the sum allocated by way of bonus on such policy is exempted from income-tax. However any sum (not including the premium paid by the assessee) received under an insurance policy issued on or after the 1st day of April, 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20% of the actual capital sum assured will no longer be exempted under this section.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 29 December 2011

LIC maturity proceeds are simply does not consist part of income, its exempted u/s 10(10D), including survival benefits and death claims.

However commuted annuity under jeevan dhara, jeevan akhay (pension plans)and keyman insurence has its own set of exemption norms, please refer the polcy doeuments for actual exemption terms and quantam.

Bhanu Prakash Rao (Think Beyond Stay Ahead...!) (1064 Points)
Replied 29 December 2011

Agree with Rajesh.....

Upgrade to CAclubindia Pro. Subscribe Now!

RONAK DARJI (CA FINAL) (382 Points)
Replied 29 December 2011

No,Maturity amount is not taxable...

Because whatever amount comes at maturity by LIC is totally exempted...

Regards,

Ronak Darji

Meera Shanker (Student) (70 Points)
Replied 07 July 2015

My insurance policy does not come under the exemption of 10(10D).I want to know whether the tax is payable on the entire proceeds (or) proceeds-premium.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 07 July 2015

Originally posted by : Learner
	My insurance policy does not come under the exemption of 10(10D).I want to know whether the tax is payable on the entire proceeds (or) proceeds-premium.

you have to look into the premiums payment and any claim filed on the premiums, in common words entire proceeds is taxable in the year of receipt. if sec 10 is not applicable

Partha Mukherjee (Associates) (23 Points)
Replied 22 July 2015

For LIC Maturity under what Should be repoted as Exampted Income -

Total Maturity Value

Total Maturity Value minus Amount Paid as Premium.

Thanks

Anand (article assistant) (23 Points)
Replied 28 December 2016

Which form to be used to file Income tax return in case of Income from LIC policy maturity and the assesse(Individual) has even business income.

Upgrade to CAclubindia Pro. Subscribe Now!

Meera Shanker (Student) (70 Points)
Replied 29 December 2016

Originally posted by : Anand
	Which form to be used to file Income tax return in case of Income from LIC policy maturity and the assesse(Individual) has even business income.

ITR 4

Aditya Tayal (2 Points)
Replied 13 July 2018

Sir,

Under which head of Income the amount received on maturity of LIC, which is not exempt under section -10(10D), will be computed and how tax would be computed on the same.

Thanks in advance