Tax on ulip - single premium policy

Save Share

This query is : Resolved

Suresh Chandra Mannava (Querist)

27 June 2018 I took LIC Wealth plus T.No 801 (ULIP based) 1,92,000 - single premium paid on march 2010
Sum assured 250000
I have other policies that cover RS 1,00,000 for the year 2009-2010 under section 80C
I didn't claim Rs 1,92,000 under 80C in 2009-2010. It is a tax paid amount.
After surrendering, I got Rs 255000 on august 2017 from LIC. That is, after 7 years of commencement.
1% TDS deducted.
Shall I need to pay tax for the gain alone as I didn't claimed under 80C? or for the whole?
If tax should be paid for whole amount, then I will be ending up paying double tax.

Please provide your opinion on the same.

Ketan Samdani

Ketan Samdani (Expert)

27 June 2018 Kindly note that the deduction allowable u/s 80C was limited to Rs. 50000/- at the time of payment of premium being 20% of capital sum assures since the payment made before 2012. Now since the premium paid is above 20% of capital sum assured the exemption available u/s 10 (10d) shall lapse and the maturity proceeds shall be taxable.

Suresh Chandra Mannava

Suresh Chandra Mannava (Querist)

27 June 2018 Thanks for the response.
Shall I need to pay tax on full maturity amount?
Premium paid towards ULIP policy can not be considered as investment?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now