LIC

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2011 Is any amount received as an installment/Bonus/interest against LIC Policy (life insurance) taxable in income tax.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 July 2011 You are talking about the receipts from LIC
but the description you have made can be perfectly correlated with the payment , which we are making to the LIC.
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Installment = Amount of premium payable to LIC. & Interest = On late payment of premium LIC charges Interest.
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I take- installments means money receivable from LIC by the policy holder under a money back policy.

Bonus/ Interest = Bonus- LIC does not give Interest, It gives Bonuses of various kinds like, revisionary bonus, loyalty addition etc.
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All sums received from LIC on maturity of the policy are tax free.
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However, where premium paid exceeds 20 % of sum assured and under a keyman policy , the amount received from LIC is Taxable.

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