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Whether it is ios or capital gain ...(urgent)
A LIC policy (Growth) has been surrendered during the year . Term of policy was 10 years , whereas the policy has been surendered after 5 years. TDS has been deducted by LIC u/s 194DA. Policy is a single premium policy. So under which head shall I treat income, Capital gain or Income from other source ?
Replies (8)
It is taxable under IOS.
Thank you Sir for replying.
But can u please explain or give supporting law .
Surrender of policy does not amount to transfer of any capital asset. It cannot be taxed under any other head of income.
Surrender of policy does not amount to transfer of any capital asset. It cannot be taxed under any other head of income.
Surrender of policy is equivalent 'relinquishment' of asset , and thus included in defination of transfer of asset.
A policy is a contract of indemnity & surrender amounts to its cancelation rather than relinquishment.
As it is sigle premium policy (growth plan) i.e a 10yrs plan , as i mentioned above ..shall it be a contract of indemnity ..??
coz as per my view , it shall be investmnet .
A policy is basically a risk cover hence contract of indemnity even if it is linked to units to provide some extra returns to the holder.
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