Treatment of s.v.received from insurance co.

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This query is : Resolved

CA Sanjay Baheti (Querist)

04 November 2011 Dear Members,

My client being an Individual has Taken a Life Time Super Insurance policy from ICICI Prudential Life Insurance Co.Ltd. for a sum assured Of Rs. 100000/- for which Premium comes to Rs. 9000/- on half yearly basis for each year for a Policy term peroid of 10 Years effective from May,2007.

My Client has paid total premiums till F.Y.2009-10 of Rs. 54000/- & claimed the same as deduction u/s 80C of I.T. Act for each Asst.Year at time of filing of ITR.

Now for F.Y.2010-11 for which ITR is yet to be filed.
During the said F.Y. My cilent has surrendered the said Policy for need of Fund to ICICI Prudential Co & received from this Insurance Co of Rs. 63382/- through NEFT in his Bank Account.

Now query is how to treated the said sum of Rs. 63382/- received during F.Y.2010-11 in his return of Income relevant to Asst.Year 2011-12 which is yet to be filed. that is is it exempt from tax as Capital receipt u/s 10 of I .T. Act or not.

Please reply at soonest.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

05 November 2011 Please refer Section 80C(5).

As the Plan has run for more than 2 years, the receipts are not taxable.

The amount is exempt U/s 10(10D)

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