Income tax 10(10d) (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
09 June 2012

i am totally confuse about i read many response relating to these....if policy taken before 2003 and policy taken after 2003.
whn get exempt when will not exempt.if premiun paid is more than 20% sum assured or whn not more...plz help me..

CA PARAS BAFNA

( Expert )
09 June 2012

Your confusion will further increase, when you will have a chance to learn more about policies taken after 31.03.2012. Premium has been restricted to 10% w.e.f. 01.04.2012.
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I shall not increase your confusion any how?
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If you have taken any policy before 01.04.2003, any sum received under the policy on maturity, like Bonus and Sum Assured .... will not be treated as taxable.
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If any Policy is taken after 01.04.2003,
maturity proceed is exempt, however, if premium exceeds 20% of sum assured, than the amount receivable becomes taxable.
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Example 1: Situation of No Confusion
1.Policy of 1.00 Lac Sum Assured -
2.Annual Premium Payable : 20000/( =20% of 100000)
3. Suppose on Maturity after 6 years if the Person Receives Rs. 140000/- , the entire amount is not taxable. It is exempt.
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Example 2: Confusing Situation: Policy taken on or after 01.04.2003

1.Policy of 1.00 Lac Sum Assured -
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2.Annual Premium Payable : 21000/( >20% of 100000)
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3. Suppose on Maturity after 6 years if the Person Receives Rs. 140000/-. Such sum is not totally exempt.
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A big big confusion still remains to be addressed, but as far as your query is concerned, I hope you will get the Answer from the above.

Author : Anonymous

( Author )
11 June 2012

Thanks alot Paras sir....but there is a mistake that if we pay more than 20% premium so whole is taxable...it should not be...

we get deduction u/s 80 c of actual amount paid or upto 20% of sum assured.?