Is New Jeevan Dhara Policy taxable

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Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2011 Is NEW JEEVAN DHARA policy of LIC is taxable if Lumpsum option is choosed (means full notional amount at a single time)

GSTP Hari Dhayalan Konar

GSTP Hari Dhayalan Konar (Expert)
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10 May 2011 Tax Benefits:
Tax relief under Section 80ccc is available on premiums paid under New Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan Dhara I (Table No.148) qualify for tax relief under Section 88.

please check the below link:

https://www.licindia.in/pension_plans_004_features.htm

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Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2011 I want to know that at the date of maturity is it taxable on the notional amount if Lumpsum option is choosed

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 May 2011 1. The amount of commutation of pension is being received from a fund. The income of the fund is exempt under section 10(23AAB).

2. The option of 100% commutation was allowed by the fund referred here in above at the time of issuance of the policy.

3. Section10(10A) is the relevant section dealing with the commutation of pension and taxability of commuted pension.

4. Clause (iii) of sub section (10A) of Section 10 specifically exempts any payment in commutation of pension of pension received from a fund under clause (23AAB) of Section 10.
5. Hence in my opinion the full commutation value, which is being paid by the fund mentioned in para (4) above, is not taxable in the hands of the recipient.
6. Further, Section 10(10D) makes any sum received under a life insurance policy exempt except certain exceptions.
The receipt in question is also not covered by the exceptions. Hence the amount received under the life insurance policy is exempt.

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CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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17 May 2011 Agree with Shri Paras Bafna.

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