Tax treatment lic market plus growth on maturity

This query is : Resolved

Share Report Follow Query Ask a Query

Harshad

Harshad (Querist)
Follow

15 March 2013 What is the tax tax treatment lic market plus growth policy ON MATURITY?

Harshad

Harshad (Querist)
Follow

18 February 2014 Still waiting for reply on this querry...:(

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
Follow

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.

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

SARAVANAN PALANISAMY

GST Karimnagar state

Darshan

Krishnamohan Gangaraju

CA Bijo scaria

Subscribe Now

Tax treatment lic market plus growth on maturity

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA