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Sec 194da tds deduction on sbi shub niwesh insurance policy maturity proceeds at the rate of 1%

Tax queries 348 views 2 replies

One of my colleague received notice from Income Tax department for AY 2017-18 showing variance in Income because of Maturity proceeds from SBI Shubh Niwesh Rs.130900/- and TDS dedn. u/s 194DA Rs.1309 in 26AS.   He was investing Rs.30000/- each year after five year he received maturity Rs.130900/-

While filing ITR2 AY 2017-18  SBI Insurance maturity amount shown as Exempt Income but In 26AS showing TDS deducted on maturity proceeds at the rate of 1% .

Whether this Insurance policy maturity proceeds received  Exempt or Taxable please guide. If taxable then  under which section it should be disclose in ITR2 so that NO notice should be received from IT Department. 

Valueable reply are highly appreciated

 

 

Replies (2)

Broadly speaking, the insurance terms having premium (paid per annum) amount less than 1/10th of Assured amount are only exempt u/s. 10 of IT act.

Secondly, the policies which are not exempt, the insurer deduct TDS over the surrender/maturity value. So, check the conditions once again; but it seems the exemption is wrongly claimed.

I was out of station. Belated Thanks Sir


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