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Life insurence

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vineet sharma (Querist)
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09 May 2009 We have taken a life Insurance policy of rs 100000. we have made payment of Rs 25000 as premium which accounts for more than 25 Percent of the policy amt.
The policy amt has matured and we have received the amt
Will full 100000 will be taxable Or rs 75000(100000-25000) wil be taxable???
The premium which we have paid will be allowed as deduction or not???
Section 10(10)(D) says that if the premium amt paid is less than 20 Percent of the the policy amt then the whole amt received will be tax free
Plesse answer this question fast

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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10 May 2009 Policy Purchased Prior to 1.4.2003 Amount Received is not Taxable. If otherwise, amount will be fully taxable if you have claimed tax rebate U/s 88 or Deduction U/s 80C.

In case no such tax benefit had been enjoyed by you, you may show Rs 75000/- , the accretion, as Income from Other Sources after a careful consulattion with your tax consultant.

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