Amount received on maturity of life insurance policy
This query is : Resolved
17 July 2017
Case. TDS was deducted @ 1% u/s 194DA on total proceeds of Life Insurance Policy.
Q1. Are the proceeds taxable? If yes, to what extent it is taxable.
Q2. Will the premium paid for which we didn't claimed any deduction u/s 80C will be allowed to be deducted from such maturity amount before being taxed.
Q1. Are the proceeds taxable? If yes, to what extent it is taxable.
Q2. Will the premium paid for which we didn't claimed any deduction u/s 80C will be allowed to be deducted from such maturity amount before being taxed.
17 July 2017
Insurance Policy Proceeds are considered exempt income u/s 10(10D) of the I.T. Act.
In general life insurance policy proceeds including bonus thereon is considered exempt. The exceptions to this are
a) sum received under a Keyman Insurance Policy
b) for policies issued from 01.04.2003-31.03.2012 if the premium payable for any of the years is > 20% of actual capital sum assured, where sum is received otherwise than on death of person
c) for policies issued from 01.04.2012 if premium payable for any of the years > 10% of capital sum assured, where sum is received otherwise than on death of person.
Section 194DA expressly states that tax is not to be deducted in cases covered by Section 10(10D). Hence assuming that the payer has properly analysed the provisions and deducted tax appropriately, the proceeds from LIP will have to be offered to tax.
I believe no deduction will be available for the premiums irrespective of whether claimed or unclamed u/s80C
In general life insurance policy proceeds including bonus thereon is considered exempt. The exceptions to this are
a) sum received under a Keyman Insurance Policy
b) for policies issued from 01.04.2003-31.03.2012 if the premium payable for any of the years is > 20% of actual capital sum assured, where sum is received otherwise than on death of person
c) for policies issued from 01.04.2012 if premium payable for any of the years > 10% of capital sum assured, where sum is received otherwise than on death of person.
Section 194DA expressly states that tax is not to be deducted in cases covered by Section 10(10D). Hence assuming that the payer has properly analysed the provisions and deducted tax appropriately, the proceeds from LIP will have to be offered to tax.
I believe no deduction will be available for the premiums irrespective of whether claimed or unclamed u/s80C
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITR 2 Short Term gain & Long term gain
- Itr 1 processing
- Reporting Income under Section 44ADA
- Off Market debit and credit transaction
- Share accounting-->fifo - capital gain - period as per fifo?
- ITR returnFY25-26
- ITR 1: Details for showing Exempt Income
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- Short Term Capital gain on shares bought and sold after 2018 onwards
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- Article ship defecit
- Bank Accounts in Balance Sheet for ITR 3
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
