Tax treatment lic market plus growth on maturity
This query is : Resolved
15 March 2013
What is the tax tax treatment lic market plus growth policy ON MATURITY?
26 July 2025
The **LIC Market Plus Growth policy** is a **unit-linked insurance plan (ULIP)** offered by LIC. The **tax treatment on maturity** depends on certain conditions under the **Income Tax Act, 1961**.
---
## ✅ Tax Treatment on Maturity (As of 2013):
### ✔️ **Exemption under Section 10(10D)**
If the following conditions are met, **maturity proceeds are fully exempt from tax** under **Section 10(10D)**:
1. **Premiums paid in any year ≤ 20% of Sum Assured**
(For policies issued **before April 1, 2012** – which applies to Market Plus, since it was discontinued before then.)
2. The policy is **not a Keyman insurance policy**.
If these are satisfied, **the full maturity amount is tax-free**.
---
## ❗ When It Is **Taxable**:
If **premium > 20% of sum assured** (for policies issued before April 1, 2012), then **Section 10(10D exemption is denied**, and:
* The **entire maturity amount is taxable** under **"Income from Other Sources"**.
* Taxed at **applicable slab rate**.
* **No indexation** or capital gains benefit.
---
## 💡 TDS Provision (Post-June 2013 Update for Reference):
From **October 2014**, under Section 194DA, **TDS of 1%** (now 5%) is applicable on **taxable insurance payouts > ₹1 lakh**. But for **March 2013**, this TDS rule **did not apply** yet.
---
## 🧾 Summary:
| Condition | Tax Treatment |
| ---------------------------------------------- | ---------------------------------------------------------------------- |
| Premium ≤ 20% of Sum Assured (before Apr 2012) | Entire maturity amount is **tax-free** under Section 10(10D) |
| Premium > 20% of Sum Assured | Maturity amount is **fully taxable** under "Income from Other Sources" |
---
### ✅ What You Should Do:
* Check the **sum assured** and **premium** structure.
* If premium ≤ 20% of sum assured → **no tax**.
* If not → include in income and pay tax accordingly.
Let me know if you want help checking eligibility for exemption with your actual policy details.
---
## ✅ Tax Treatment on Maturity (As of 2013):
### ✔️ **Exemption under Section 10(10D)**
If the following conditions are met, **maturity proceeds are fully exempt from tax** under **Section 10(10D)**:
1. **Premiums paid in any year ≤ 20% of Sum Assured**
(For policies issued **before April 1, 2012** – which applies to Market Plus, since it was discontinued before then.)
2. The policy is **not a Keyman insurance policy**.
If these are satisfied, **the full maturity amount is tax-free**.
---
## ❗ When It Is **Taxable**:
If **premium > 20% of sum assured** (for policies issued before April 1, 2012), then **Section 10(10D exemption is denied**, and:
* The **entire maturity amount is taxable** under **"Income from Other Sources"**.
* Taxed at **applicable slab rate**.
* **No indexation** or capital gains benefit.
---
## 💡 TDS Provision (Post-June 2013 Update for Reference):
From **October 2014**, under Section 194DA, **TDS of 1%** (now 5%) is applicable on **taxable insurance payouts > ₹1 lakh**. But for **March 2013**, this TDS rule **did not apply** yet.
---
## 🧾 Summary:
| Condition | Tax Treatment |
| ---------------------------------------------- | ---------------------------------------------------------------------- |
| Premium ≤ 20% of Sum Assured (before Apr 2012) | Entire maturity amount is **tax-free** under Section 10(10D) |
| Premium > 20% of Sum Assured | Maturity amount is **fully taxable** under "Income from Other Sources" |
---
### ✅ What You Should Do:
* Check the **sum assured** and **premium** structure.
* If premium ≤ 20% of sum assured → **no tax**.
* If not → include in income and pay tax accordingly.
Let me know if you want help checking eligibility for exemption with your actual policy details.
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