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SBI life insurance maturity withdrawal is taxable or not

10 July 2019

Dear Team

There is withdrawal of life Insurance maturity and TDS 194 DA was dedicated and the premium paid is 4960 per month and sum assured is 231,000 policy taken after 2012 ...
How does it get taxable and under which head... please let me know
Abhishek k

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2 Replies

V. NAVEEN KUMAR SICASA (182 Points)
Replied 10 July 2019

Since premium amount is less than 10% of the sum assured, it is exempted from taxation

Suresh Thiyagarajan (Student) (3986 Points)
Replied 10 July 2019

1. According to sec 10(10D), LIC maturity amount will be exempted if the premium paid is not more than 10% of the sum assured.
2. I am assuming you have paid the premium for the entire year which comes to Rs. 59,520 (4,960*12). This is in excess of 10% of the sum assured (2,31,000*10%=23,100), hence the maturity amount will not be exempt in the hands of the receiver. Hence, deduction of TDS u/s 194DA @ 1% on the amount of Rs. 2,31,000 would have been deducted.
3. Hence, in the given case the entire amount of Rs.2,31,000 will be taxable under the head "Income from Other sources" in the year of receipt.
Please correct me if the above solution has an alternative view.