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6. Harsh, a resident, is due to receive Rs. 6.50 lakhs on 31-3-2019,
towards maturity proceeds of LIC policy taken on 1-4-2014,
for which the sum assured is Rs. 5.25 lakhs and the annual
premium is Rs. 1,25,000. Examine the applicability of the
provisions for tax deduction at source under section 194DA.
Replies (1)

As per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions. But

These policy proceeds will be taxable in the hands of the insured in the following situations:
As per section 10(10D) in case of a life insurance policy issued after 1.4.2003 but on or before 31.3.2012 if the premium payable in any year exceeds 20% of the actual sum assured, then the policy proceeds would be taxable in the hands of the insured.

For policies issued on or after 1.4.2012, the above mentioned limit of 20% has been changed to 10%.

As the policy was purchased on 01.04.2014, (i.e. after 01.04.2012) & the premium paid of Rs. 1.25L is higher than 10% of Sum Assured of Rs. 5.25L, So its taxable.

As per sec. 194DA, 1% of the total amount received for such policy is deducted as TDS. So the TDS deducted will be Rs. 6,500/-


Read more at:
//economictimes.indiatimes.com/tomorrowmakersshow/69425598.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
As per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions.

 
Read more at:
//economictimes.indiatimes.com/tomorrowmakersshow/69425598.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
s per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions.
 
Read more at:
//economictimes.indiatimes.com/tomorrowmakersshow/69425598.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
s per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions.
 
Read more at:
//economictimes.indiatimes.com/tomorrowmakersshow/69425598.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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