I have a query regarding LIC's money back policy. Here are my plan details:
Policy Name : New Money Back Plan - 20 Years (Plan-820) Sum Assured : 5,00,000 Premium Amount : 9,556 (quarterly) + Service Tax Commencement Date : 28 Feb 2015 Maturity Date : 28 Feb 2035
Since, 5 years will be completed on 28th Feb 2020 this year, I have received an intimation from LIC for the payment of the Survival Benefit Amount of Rs 89,964. My concern is that I should be getting Rs 1,00,000 as per the policy. Why have they deducted Rs 10,000 from the Survival Benefit amount? Have they deducted TDS? As far as I am aware of, TDS is deducted only when the premium paid is more than 10% of the Sum Assured(which is not the case here). Could any expert in this forum enlighten me? Any information will be much appreciated.
13 January 2020
Under section 10(10D), maturity proceeds received under a life insurance policy are exempt from tax. However, the benefit is not extended to policies where the annual premium exceeds 10% (20% in case of policies sold prior to April 2012) of the sum assured. In your case, since the premium amount is not greater than 10%, TDS is not applicable. Kindly contact your insurance agent and ascertain the reasons for this difference.
13 January 2020
Thank you for the info, Shailesh! I raised an online query on LIC. As per them, TDS will not be deducted and I will receive the full survival benefit amount. The whole confusion was just because of the fact that the LIC sent the intimation letter even before my last premium was due. Hence the difference of 10k.
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