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Taxability on the amount received on the death of insured ?

sumit (CA PCC STUDENT) (37 Points)

27 October 2009

Hi All,

I have a query as to what is the taxability on the amount matured on the following policies. Pls let me know your view !!!

Reliance General Insurance Co., - Rs.500000

ICICI Prudential Insurance Co., - Rs.3000000

Bajaj Allianze Insurance Co., - Rs.45415

ULIP Insurance Co., - Rs.86629

New India Assurance Co., - Rs.200000

LIC of India - Rs.5502184 (Total of all policies)

Kotak Mahindra Insurance Co., - Rs.428000

Corporation Bank Insurance Claim - Rs. 100000

Pls also give me hints from where i can come to know about the taxability on the same

Warm Regards,

Sumit Nelavigi.

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5 Replies

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 27 October 2009

The amounts received on the death of the insured are exempt from tax under section 10(10D) in the hands of the receiver.

Regards,

CA. Amol G. Kabra

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Sandeep Pandey (CA FINAL) (1306 Points)
Replied 27 October 2009

Thank u very much sir................

sumit (CA PCC STUDENT) (37 Points)
Replied 30 October 2009

Thank u very much sir.

GITA CHAUHAN (Chartered Accountant) (22 Points)
Replied 06 November 2009

A widow receied Arrears on account of 6th pay commission on the behalf of her husband . whether such income in the hand of wife is taxable or not

Sunil (Trader) (2611 Points)
Replied 06 November 2009

Gita,

Usually the amount received by widow is as a nominee on behalf of all legal heirs. The amount received is still taxable at the hands of the estate of the deceased where usually the widow is filing returns as the representative assessee. This is until the probate is completed on will or on intestate death. The taxes may have been deducted at source also on these arrears. The widow will file return as representative assessee and all taxes will be payable incl. on interest incomes till the assets are distributed by probate after which each legal heir is responsible for what he / she receives. Nominee is always holding funds / properties on trust and behalf of all legal heirs.The Tax on insurance receipt is not taxable. This is only for the 6th Pay commission arrears to the extent it was taxable to the deceased.