31 May 2013
I invested 15000 p.a in max newyork life insurance since 7 years, but in March 2012 i withdrawal the policy and co. refund some of Rs.100000/- against the amt of premium which was i paid.
my que.is this refund amt taxable or not in income tax ?
31 May 2013
As per the section 10(10D) Any sum received under a life insurance policy including the sum allocated by way of bonus on such policy is exemption. However this exemption doesn't apply to any amount received
a) Under the scheme referred to in sec.80DD or sec.80DDA or
b) Under a keyman insurance policy including bonus thereon or
c) Under an insurance policy in respect of which the premium payable of any of the years exceeds 10%(Upto 31st March 2012 it is 20%) of the actual capital sum assured.
As well as, as per section 80C if the LIC policy is terminated before the payment of 2 years premium or in case of single premium policy with in 2 years then the section 80C deduction not available as well as previously claimed exemption amount shall be taxable in the year of termination.
So in your case you paid premium of 7 years so section 80C dissallowance not applicable and assuming you didn't satisfy any restructions indicated in section 10(10D) so it is exempted to you.
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