pre maturity of LIC policy Taxability
Vijay Beniwal (Samalkha) (25 Points)
20 November 2018
Taxability of Pre matured life insurance policy
1 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(185057 Points)
Replied 20 November 2018
The surrender receipts are tax free if following conditions are fulfilled:
- Policies issued before March 31, 2003
- Policies issued between April 1, 2003 and March 31, 2012 and the sum assured is more than 5 times of annual premium paid
- Policies issued after April 1, 2012 and the sum assured is more than 10 times of annual premium paid
Additionally the tax benefit on premiums paid in earlier years under section 80C can be reversed if
- In case single premium policy has not been held for at least two years
- In case of traditional policies like endowment & money back haven’t paid at least 2 years premium or
- atleast 5 years premium in case of ULIPs (unit linked insurance plan) is not paid
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