ICICI prudential Premier life insurance policy (unit linked) has matured approx Rs 15 Lakhs. There is no sum assured as mentioned in the policy. There was an option to opt for 1/3rd commutation and balance as annuity. However as per advice of the agent, the client has opted for the whole amount.
No tds has been deducted. The premiums paid were 490000(2007), 100000(2008) and 100000(2009).
How will the amount of 15L received be taxed?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(194897 Points)
Replied 25 June 2018
"Commutation of pension on vesting date is tax free under section 10(10A) of the Income Tax Act,1961, amount received on surrender, as pension is taxable as income."
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(194897 Points)
Replied 03 July 2018
The maturity proceeds as a whole is exempt u/s. 10(10A), because invested in annuity product.
Now the pension amount will be taxable, so finally it is taxed on withdrawal and not over transfer to pension plan.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(194897 Points)
Replied 03 July 2018
As per the terms of the policy, it seems only 1/3rd tax-exempt. But when no TDS amount deducted, treat it as exempted u/s 10(10D).
Thanks for the prompt reply. Now a days the assessees are getting notices from Income tax officer -Intelligence & criminal Investigation whenever policies of huge amounts are matured. The onus is kept on the assesse to prove that the policy proceeds are tax exempt.
I wish all the policy products mentioned clearly the tax implications in all the possible scenarios w.r.t 80C or 10(10A)/ 10(10D)
rajesh
(MBA)
(102 Points)
Replied 06 July 2018
For the same icici premier life unit linked policy, 1% tds have been deducted. so does that mean that whole amount is taxable or 1/3 amount is tax exempted.
2) Are all ulip policies tax exempted.
plz clarify
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(194897 Points)
Replied 06 July 2018
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