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Death claim from lic

Milind Kulkarni (CA Practice ) (81 Points)

07 April 2015

One of my acquaintances has received a lump sum from LIC after death of his wife from pension policy in her name. My question is, since this was a pension policy and not a regular life insurance policy, will the death claim received be exempt under Section 10 (10D) of Income Tax Act or will it be taxable?

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4 Replies

(Guest)

Any commuted pension received by an individual out of annuity plan of the life insurance corporation of India (LIC) from a fund setup by that corporation is exempt u/s 10(10A)

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Milind Kulkarni (CA Practice ) (81 Points)
Replied 07 April 2015

Thanks Madhavi. So, practically though it is exempt, academically, will it be covered under Sec. 10 (10A) and not 10 (10D) even though it is received after death of the pension holder?

Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 07 April 2015

If policy belongs to section 80CCC(1) then death claim is taxable in the hands of the recipient.

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Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 07 April 2015

Death claim differs from commuted value. Even commuted value is tax free only on those pension plans which qualify for the purpose of 10(23AAB). Refer 10(10A)(iii).

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