Insurance amoumt exempted

to encourage savings among people, the legislature made such provisions

Exemption under section 10(10D) on Maturity amount received –When the premium paid on the policy does not exceed 10% of the sum assured – any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax.

Taxation where the premium paid is more than 10% of the sum assured – Any money received from a life insurance policy, where the premium is more than 10% of the sum assured is fully taxable. This income is added under the head ‘income from other sources’ and taxed at slab rates applicable to you.