Lic refund

This query is : Resolved

PUNEET GUPTA (Querist)
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26 September 2012 KAYA LIC KA REFUND TAXABLE HAI AGER LIC KO MATURITY PERIOD SE PEHLE HI TURVA DIYA JAAYE OR KITNA TAXBLE HAI, Eg MERE EK FRIEND NE LIC LI 20 YEARS KE LIYE, AB WO 4
YEARS KE BAAD LIC KO TURVA RAHA HAI, USNE PEHLE 80C BHI CLAIM KIYA HAI, KAYA AB USE LIC REFUND PE TAX DENA HOGA OR KITNE AMT PE

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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03 October 2012 If an assessee has claimed deduction in respect of LIC and he terminates the insurance contract BEFORE 2 years, the amount of deduction shall be taxable in the year in which the contract is terminated.

In this case, the contract is terminated after 4 years, thefeore the same shall be exempt.

However, it is not advisable to surrender the policy so early. He will not even get the premium that he has paid till date.

If he needs funds, he can take a loan from LIC against his policy.

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