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Section 194D tds on lic maturity

16 February 2020

i want to confrim that the income that is received from lic maturity being premium more than 10% of the sum assured, that whole amount received is taxable or net proceeds(i.e. amount paid minus premiums)

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5 Replies

Alok Singh (209 Points)
Replied 16 February 2020

It will be exempted, coz.. at the time of giving premium greater that 10% of sum assured would not be allowed as deduction under section 80C

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Deepak Garg (3 Points)
Replied 16 February 2020

Sir are you sure it will be exempt as tds will be deductible and yes under 80c deduction was not allowed
but i am still confused about taxbility

Kapadia Pravin (17259 Points)
Replied 16 February 2020

TDS deduction is obligatory on policy maturity under 194D

However here it's a policy not recognised for 80C purposes and hence it's a mere investment type policy.

Any excess than premium paid will be taxable under IFOS.

Alongwith maturity letter, you get a letter of break up amounts which it indicates.

Alok Singh (209 Points)
Replied 16 February 2020

I think Kapadiya Sir, you have given the right answer

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 23 August 2020

@ Deepak ji
It's not exempt...if premium is more than 10%/20% as the case may be

Incase an assessee receives LIC maturity which is not exempt u/s 10(10D), (as in your case ) than [ Maturity Amount less all Premium paid ] by you is taxable as income from other sources. and you can claim TDS which is deducted, in your IT return.

So, Total/Gross amount is not taxable, only Income portion is taxable.