14 June 2016
As per Section 10(10D) - any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy is exempt from tax with certain conditions.
Please guide me with some case laws stating that "Amount received from LIC" also Includes amount received on event of Surrender of Policy.
15 June 2016
You didn't mention the policy date of purchase/surrender/maturity and premium paid status to resolve your query interalia. However, surrender of policy would involve taxation on 2 counts: (a) taxability of surrender value (b) reversal of exemptions claimed under section 80C in previous years Conditions for taxability may be saved if: (a) 1. You have paid your insurance policy premiums for at least 2 years after buying the policy. 2. In case of single premium policy, you have held the policy for at least 2 years. (b) If you have held the policy for at least 5 years after buying and then surrendered it, then you DO NOT have to reverse any section 80C benefits too, that you claimed in the previous years.
CAclubindia
