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Lic matured

T.T.VIJAYAPRAKASH (properter) (253 Points)

06 July 2019

SIR,

MR. A LIC I POLICY INSURED 7.00LAKS AS ON 2009. THE POLICY MATURED 14.LAKSH AS ON 30.06.2019. AND TDS DEDUCTED ON MATURED AMOUNT.

MY QUESTIONER IS TAXABLE IS FULL MATURED AMOUNT ARE INSURED AMOUNT ONLY.

HEAD OF SOURCES

THANKS

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2 Replies

Satya N Dharani (Finance Professional) (491 Points)
Replied 06 July 2019

the following is self explanatory;

Exemption under section 10(10D) on Maturity amount received

When the 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). Also covered here are policies taken after 1 April 2013, on the life of a person with a disability or a disease specified under Sections 80U and 80DDB respectively, where the amount received on maturity is tax-free provided the premium paid does not exceed 15% of the sum assured.

No exemption from income tax on the maturity of policies

Taxation, where the premium paid, is more than 10% of the sum assured – Any money received from a life insurance policy, where the premium is more than 10% or 20% of the sum assured as the case may be, is fully taxable.

TDS on life insurance policy

Starting October 2014, if the amount received from a life insurance policy is more than Rs 1,00,000, on policies not covered under an exemption under Section 10(10D), then TDS @ 1% shall be deducted by the insurer before making this payment. TDS will also be deducted on bonus payments. If the amount received is less than Rs 1,00,000 no TDS shall be deducted but the amount received shall be fully taxable for you. You can claim credit for the TDS deducted in your Income Tax Return.