I have taken LIC Wealth Plus Policy on 25/9/2010 with the single premeim of Rs.2,00,000. And it got redeemed on 16/1/2017, with the redeumption proceeds of Rs.256000.
Now, whether the redumption proceeds are taxable or not?
If it is taxable, what it the amount of taxable and under which head it will be taxable?
In this case LIC of India has deducted TDS on the redumption proceeds @ 1%. i.e Rs.2,560
He must have claimed 2,00,000 as deduction u/s 80C, so entire amount is taxable
May i know what is the nature of this policy? Is it life insurance?
TDS deduction shows that your policy is taxable. If it was purchased before april 2012, then its sum assured should have been atleast 5 times of annual premium and if purchased after april 2012 then the sum assured should have been 10 times of annual premium to make your policy non taxable.
Now dedcution of this TDS is like an intimation to tax authorities and indication to you that you have taxable income from insurance policy too.
If the policy is pension plan then you have to add the complete surrender/maturity proceeds in your taxable income and calculate tax on total income. If your income is below the basic exemption limit then you can claim back 2% paid as TDS otherwise have to pay extra tax.
If you policy is ULIP , then add only the gain amount.
Hope this helps.
Reference : Quora
I Hope this helps..
I am totally confused.
It seems LIC wealth plus is ULIP. I took the policy in 2010. Payed single premium of 192000. Terminated the policy in 2017 and got 255685 in 2017.
1% TDS is deducted at source. Gain is Rs 63.6K.
Shall I need to pay tax for the gain or total of 255685? Some say ULIP after 5 years is tax free.
Some say, any money received from a life insurance policy, where the premium is more than 10% of the sum assured is fully taxable.
Please clarify.
Suresh
Hello Suresh
My case is same. Please tell me how you have managed this. Have you paid tax on maturity proceed or only on profit.
Your experience will help me as I have declared maturity amount and demand comes from CPC to deposit tax.
Anil Trivedi
9717891620
Premium paid on ULIPs is eligible for a deduction under Section 80C up to a maximum of Rs 1.5 lakhs during a year. Further, the amount you receive on maturity is tax exempt under Section 10(10D) from https://cleartax.in/s/unit-link-insurance-plan-ulip#incometa
CAclubindia
