Taxability of single premium lic policy

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Siva Rama Krishna (Querist)
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27 November 2017 Dear Professional Collegues, I had a doubt regarding taxability of Single premium LIC policy which i was taken for 15 Years on 25/12/2013 and paid single premium amount of RS.25,59,044/- and sum assured amount is 34 laks and in the specifications of the policy 15% of Sum Assured will be paid at the end of 3rd,6th,9th and 12th policy year. and my question is i received Received 520000 (i.e 15% of 34 lakhs) then what about the taxability.and they deducted TDS @ 1% is it entire amount is taxable? I taken loan on that bond may i take Interest paid on that loan as expenses Please provide me your valuble Suggestions as per the IT act Thanking You, Krishna

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 November 2017 !% tax deduction on the amount received on such policies is correct as per the
phraseology of section 194DA of the Income tax Act,1961. Deduction for
interest on loan is not permitted per law.

Siva Rama Krishna

Siva Rama Krishna (Querist)
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28 November 2017 Ok sir,

Iam asking about the taxability of Rs. 5,20,000/- please calrify about this
and my question is why should i have to pay tax on that income when i invested out of savings and taxable paid incomes
please provide me the appropriate solution

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 November 2017 That 5,20,000 is not an exempted income vide section 10(10D),hence the ITO will
assess and tax the said amount. Being an assessee, the law provides to contest
in appeal with the question / facts raised by you in the query.

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