Exemption of income

1. When the Annual premium paid on the policy does not exceed 10% of the sum assured for policies issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012– any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax under Section 10(10D)

2. if Annual Premium paid on the policy exceed the 10%,/ 20% as the case may be, than (Maturity value less all Premium Paid) is taxable as income from other sources.

In your case...(Maturity value less all Premium Paid) is taxable as income from other sources as explained above in point No. 2

If possible please explain with one simple example

Suppose, One LIC policy have Sum assured 2,00,000 and Annual premium of Rs. 15,000.
than if Annual Premium is less than 10% of sum assured (i.e 10% of 2,00,000 =20,000) than full amount exempt.
In our case Annual premium Rs.15,000 is less than 20,000, So, Maturity value received is totally Exempt u/s 10(10D)

but If annual premium more than 20,000 than amount received on maturity is taxable but only income portion taxable, means (Maturity value received minus Premium Paid = Your Profit/interest) is taxable as income from other sources.

Thank you sir

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