Quick Summary
LIC Jeevan Labh is a limited premium endowment plan that offers both life cover and maturity benefits. Its a non-linked, with-profit plan, meaning it participates in bonuses declared by LIC. This plan offers tax-saving benefits under 80C and 10(10D). Is the ₹5 Lakh Maturity Amount Taxable? The
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FAQ :
For policies issued on or after April 1, 2023, if the aggregate annual premium paid exceeds Rs 5 lakh, the maturity amount is taxable. For policies issued before this date, the tax exemption under Section 10(10D) typically applies if premiums do not exceed 10% (or 20% for policies before April 1, 2012) of the sum assured.
No, any amount received by a nominee on the death of a policyholder is 100% tax-free, irrespective of the premium amount or the policy's issue date.
Yes, the policy issue date is important. Policies issued on or after April 1, 2023, are subject to the Rs 5 lakh aggregate annual premium limit for tax exemption on maturity. Policies issued before this date follow older rules where the exemption is generally available if premiums are within a certain percentage of the sum assured.
If your policy was issued on or after April 1, 2023, and your aggregate annual premium exceeds Rs 5 lakh, the maturity proceeds will be taxable. This rule does not apply to death benefits.
If your maturity amount is taxable, only the amount exceeding the total premiums paid is considered 'income from other sources' and taxed according to your income tax slab rate.
Yes, if the maturity amount is taxable and exceeds Rs 1 lakh, LIC may deduct Tax Deducted at Source (TDS) at a rate of 5% under Section 194DA.
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