Need help with Exclusion Ratio in Taxation on Annuities (LIC)

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I have an annuity policy with the Life Insurance Corp of India. This was purchased many years back with my post-tax income. I am already receiving the annuity periodically. All these years, I was treating this as fully taxable income when filing my tax returns. Recently I have come across articles about Exclusion Ratio in relation to taxation of annuities, e.g. see the CAclubIndia article  Annuity Taxation.

I have tried finding out the exclsion ratio and also contacted LIC, but have drawn a blank so far.  The people I contacted seem to be unaware of such a term.

My questions:

  1. Any guidance on how to find out the exclusion ratio for my LIC annuity policy? Does any one have any experience (success) in this regard?
  2. Where (in which section) in the incometax act will I be able to find the mention of excluion ratio in relation to taxation of annuities?

Thanks

Replies (3)
Quick Summary
This discussion seeks guidance on calculating the exclusion ratio for Life Insurance Corporation (LIC) annuities purchased with post-tax income. The user is currently paying tax on the entire annuity income but has learned about the exclusion ratio concept used in other countries. Despite contacting LIC and a CA, they are struggling to find information or confirmation on its applicability under Indian income tax laws, with some cautioning against its use. The user is looking for expert advice on how to determine the exclusion ratio or if it's even a viable tax-saving strategy in India.

Annuity taxation is explained already 

Annuity taxation is explained already 

Here is an update to this query: I interacted with a CA on this topic but it he/she cautioned me that it is not clear if exclusion ratio for annuity taxation is applicable under the Indian incometax laws and it might be risky if we use the USA method of exclusion ratio and classify the annuity income into non-taxable and taxable components.

Before I give up on this, I would like to know if there are any other experts who are authorized and willing to help me with exclusion ratio based tax saving on my annuity income. Kindly let me know. Thanks.  

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