Lic maturity amount

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2013 On Death claim LIC maturity amount of Rs. 500,000 is received. Also some bonus is received on self LIC policy.
Is it necessary to show this amount in Exempted Income.
If the same is not shown in IT Return, what will be the consequences.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 July 2013 Yes . Exempted income should be shown. If not shown, it will become contrary to the 'verification' part of the return, meaning thereby, return will not be true and correct. Wrong declaration ,through an untrue return ,can lead upto prosecution which the authorities seldom exercises.

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2013 Sir, when we show this amount in Exempted income, then the source of this LIC Maturity amount is not clear to the Income Tax Department through IT return. So this Rs. 500,000.00 will create a chance of scrutiny.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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31 July 2013 No, department does not inquire with a family in grief. The premium was deductible upto a limit of Rs 1.00 lac, so hardly any explanation will be required.
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To show the premium payment was the responsibility of the deceased. Neither AO can talk with him directly nor he can get anything from him.
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But the person who is alive, has to explain the huge claim amount received. His work gets over as soon as he shows the claim disbursement letter of the Insurance Co., in case any inquiry is made.
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