Taxation of proceeds from life insurance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 August 2014 Sir, it is known that under section 80C premium only up to 10% sum assured is deductible. Whether the maturity proceeds of such policy is exempted under 10(10D). Does section 10(10D) sub clause (d) mean such proceeds are taxable. If yes, entire proceeds are taxable?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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20 August 2014 It says "(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured".

So if the premium paid exceeds 10% of the actual capital sum assured then entire amount will be taxable. If such amount is received on death then entire amount will be exempt.