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LIC Policy Expire

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Meet Parekh

77 Points Posted on 08 January 2021

if any individual paid premium from preceding years after some of year LIC Money back Policy Expire and amount credited to bank account so the amount is taxable or exempt?

if taxable then which section applied?

Replies (2)

Quick Summary

This discussion clarifies the taxability of money received from an LIC policy after its expiry, particularly when premiums were paid in previous years. The key factor determining tax exemption is the premium amount relative to the sum assured. Amounts received on maturity or as bonus are generally exempt from Income Tax under Section 10(10D) if premiums do not exceed 10% (for policies post-April 2012) or 20% (for policies pre-April 2012) of the sum assured.

Kapadia Pravin

10683 Points Posted on 08 January 2021

Exempt

Krishna Chaudhary

Accountant

1331 Points Posted on 08 January 2021

When the premium paid on the policy does not exceed 10% of the sum assured for policies issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012– any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax under Section 10(10D).