TAXABILITY OF INCOME
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 May 2011
WHETHER AMT RECD FROM LIC SUPER ANNUATION , PF PENSION, DIVIDEND FRON BIRLA TAX RELIEF'96, icici TAX PLAN DIVIDEND IS EXEMPT OR TAXABLE ?
THE INCOME RECD FROM REDEMPTION OF LIC ULIP PLAN OR ANY OTHER PLAN IS TAXABLE UNDER CAPITAL GAINS.WHETHER CORRECT?
THE INCOME RECD FROM REDEMPTION OF LIC ULIP PLAN OR ANY OTHER PLAN IS TAXABLE UNDER CAPITAL GAINS.WHETHER CORRECT?
02 May 2011
i think all amount is exempt form tax
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 May 2011
wht abt the taxability of units of LIC which is redeemed ?
26 July 2025
Here's a clear summary for your query on taxability of amounts from LIC superannuation, PF pension, dividends from tax-saving plans, and redemption of LIC ULIP units:
---
### 1. **Amount received from LIC Superannuation & PF Pension**
* **Superannuation (Lump sum):** Generally, **exempt from tax** if received as a lump sum on retirement or termination under the scheme and subject to conditions under **Section 10(13)** or **Section 10(10AA)**.
* **PF Pension:** Amount received as pension from recognized PF schemes is generally **taxable as salary or pension income**. However, **withdrawals** from PF (like from EPF) are exempt if conditions under **Section 10(12)** are met (like 5 years continuous service).
### 2. **Dividend from Birla Tax Relief '96, ICICI Tax Plan Dividend**
* **Dividends from Mutual Funds or LIC Tax-saving Plans** are **exempt from tax in the hands of the investor** under **Section 10(34)** (subject to Dividend Distribution Tax paid by company/fund).
* However, since Finance Act 2020, dividends are taxable in hands of shareholders as per applicable slab rates (so the above exemption may not apply now; confirm the latest law).
### 3. **Redemption of LIC ULIP Plan or any other plan**
* Redemption proceeds of ULIP units may be subject to **capital gains tax**.
* If the premium paid does not exceed Rs. 2.5 lakhs per annum, then proceeds are exempt under **Section 10(10D)**.
* If conditions are not met, gains are taxable as **capital gains** (short or long term depending on holding period).
### 4. **Taxability of units of LIC redeemed**
* Redemption of LIC mutual fund units is subject to **capital gains tax**:
* **Short-term capital gains (STCG):** if units held ≤ 36 months (equity funds: 12 months).
* **Long-term capital gains (LTCG):** if units held > 36 months (equity funds: 12 months). LTCG on equity above Rs. 1 lakh is taxable at 10%.
---
**Summary Table:**
| Income Source | Tax Treatment |
| ----------------------------------- | -------------------------------------------------------------------- |
| LIC Superannuation lump sum | Exempt under Sec 10(10AA) |
| PF Pension Amount | Taxable as salary/pension |
| Dividends from tax saving plans | Earlier exempt (Sec 10(34)); Now taxable per slab |
| Redemption of LIC ULIP units | Exempt if premium ≤ Rs 2.5L (Sec 10(10D); else taxable capital gains |
| Redemption of LIC mutual fund units | Capital gains (STCG or LTCG) |
---
If you want, I can provide latest updates or relevant case laws!
---
### 1. **Amount received from LIC Superannuation & PF Pension**
* **Superannuation (Lump sum):** Generally, **exempt from tax** if received as a lump sum on retirement or termination under the scheme and subject to conditions under **Section 10(13)** or **Section 10(10AA)**.
* **PF Pension:** Amount received as pension from recognized PF schemes is generally **taxable as salary or pension income**. However, **withdrawals** from PF (like from EPF) are exempt if conditions under **Section 10(12)** are met (like 5 years continuous service).
### 2. **Dividend from Birla Tax Relief '96, ICICI Tax Plan Dividend**
* **Dividends from Mutual Funds or LIC Tax-saving Plans** are **exempt from tax in the hands of the investor** under **Section 10(34)** (subject to Dividend Distribution Tax paid by company/fund).
* However, since Finance Act 2020, dividends are taxable in hands of shareholders as per applicable slab rates (so the above exemption may not apply now; confirm the latest law).
### 3. **Redemption of LIC ULIP Plan or any other plan**
* Redemption proceeds of ULIP units may be subject to **capital gains tax**.
* If the premium paid does not exceed Rs. 2.5 lakhs per annum, then proceeds are exempt under **Section 10(10D)**.
* If conditions are not met, gains are taxable as **capital gains** (short or long term depending on holding period).
### 4. **Taxability of units of LIC redeemed**
* Redemption of LIC mutual fund units is subject to **capital gains tax**:
* **Short-term capital gains (STCG):** if units held ≤ 36 months (equity funds: 12 months).
* **Long-term capital gains (LTCG):** if units held > 36 months (equity funds: 12 months). LTCG on equity above Rs. 1 lakh is taxable at 10%.
---
**Summary Table:**
| Income Source | Tax Treatment |
| ----------------------------------- | -------------------------------------------------------------------- |
| LIC Superannuation lump sum | Exempt under Sec 10(10AA) |
| PF Pension Amount | Taxable as salary/pension |
| Dividends from tax saving plans | Earlier exempt (Sec 10(34)); Now taxable per slab |
| Redemption of LIC ULIP units | Exempt if premium ≤ Rs 2.5L (Sec 10(10D); else taxable capital gains |
| Redemption of LIC mutual fund units | Capital gains (STCG or LTCG) |
---
If you want, I can provide latest updates or relevant case laws!
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