Hello Friends,
Am new here so please bear with me.
I had taken a pension plan policy with ICICI Prulife. The policy was taken before the IT law was ammended to include returns of the policy taxable.
The policy I took was the Lifetime Super Pension Plan where in I invested 1 lakh for the first 3 years starting 9 December 2006.
The policy has now matured and I now understand that I have can my returns as pension which will in turn be taxable under the head "Salary".
I also understand that I can get back my money in full making the excess over investment taxable. I invested 3 lakhs and the return is roughly 10 lakhs. Therefore 10-3=7 lakhs is taxable. Now, my questions are:
a) In the second case, if I take my money in full, under what head is the income taxable? Is it Capital Gains? If Yes, can I index my investment and can I re-invest the money in some NHAI or REC bonds for 3 years to avoid income tax?
b) If I take my returns as pension, is there any type of standard deduction I can claim?
Taking a policy is so messed up and such a pain if IT laws are working with retrospective effect. I think I'll just not get into insurance policies anymore :(
Thank you for any help you can provide.
CAclubindia
