Lic survival benefit

This query is : Resolved

Lakshmi (Querist)
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19 October 2016 Hello friends

Mr. A has lic policy (Single Premium lic) which generates survival benefit in every three years. Lic has deducted tds on same which is reflecting in 26 AS of party. So how to show in the books of Mr. A.
Please note that Mr. A has taken loan against premium so whether we should adjust against loan or show income separately in p&l a/c?

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SUm Assured 700000
Premium Paid 630000
Loan taken 540000

Please guide.

pavannuli

pavannuli (Expert)
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19 October 2016 TDS will be deducted by LIC at the time of maturity, if the policy is purely covering life of the assured the matured proceeds will be taxable under the head other sources, the loan amount he got will be shown as liability in the balance sheet if used for the purposes of business or profession ,the single Premium he paid is shown as investment in the asset side, the interest amount is shown as expense

pavannuli

pavannuli (Expert)
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19 October 2016 In my opinion As the policy will be cease to exist on maturity, the recognition of income in other sources will be suffice.

Lakshmi

Lakshmi (Querist)
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20 October 2016 thanks mam for replying..

Policy Start date 28/11/2013
maturity date of policy 28/11/2022

we r paying interest in every six months & book as a interest expense.

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