Income tax on maturity of insurance policy

Dear Sarah, I believe Rs 2 lakhs was the sum assured and Rs 2,79,990 was the maturity amount. It's not clear what was the total premium paid for the policy. Your taxability also depends on the ratio between total premium paid and sum assured. Can you please provide details on total premium paid, which can help in answering your query.

Thank you for the clarity. In that case we need to know what was the sum assured, which could be written in the policy document or first premium receipt as sum assured or coverage or risk coverage.

In your case, Rs 2,79,990 is the maturity amount, which can be different from sum assured. As your policy is taken in 2010, your premium should be less than 20% of the sum assured for it to be tax free. If not, the entire maturity amount will be taxable as per your slab,