S. Vaidyanathan (Retired) (28 Points)
14 October 2016I have received lic settlement of 2.5 lacs from sbi life. They have deducted 2% TDS on the payment which includes assured sum plus bonuses. This does not fall under 10 10D. If I take the full payment as income, can I show the premiums paid as expenditure Inder 57(Icici) and calculate the taxable income accordingly
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167606 Points)
Replied 31 October 2016
Yes, you can deduct the premium paid to arrive at net taxable income form the policy.
Abhinav
(CA)
(397 Points)
Replied 01 November 2016
There is a lack of clarity on this issue that in such cases, the income should be treated in which head, income from capital gains or other sources. In my view, in such cases, life insurance policy qualifies as a "capital asset" and hence income has to be shown as a capital gain and relevant computation done accordingly. First poremium paid can be considered as cost of acquisition and secomd onwards can be considered as cost of improvement.
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