Have Surrendered traditional policy after 5 years of investment. policy commencing date 28.10.10.sum assured 3,75000 premium 50k annually. SV is taxable? Co.deduct tax on SV. Can I claim refu
nd in my revised return.
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Tax deductions on SV of insurance policy
Replies (8)
Please clarify........ did you surrender policy after 5 years, but in FY 2015-16?
yes, in April 2016
Write to insurance company for wrongly deducted TDS.
As for the policy purchased before April, 2012, TDS is required to be deducted only if premium paid is more than 20% of sum assured.
In this case if sum assured is 3.75 lakhs and premium PA is 50K, TDS liability doesn't arise.
Once TDS deducted, CPC will assess it as taxable income.
Refer: claiming-tax-benefit-on-life-insurance-premium-decoded
Then what shall I do, Co. said that I can claim refund. CPC issued notice mentioning discrepancy in other source of income.
If company can provide you letter clarifying wrongly deducted TDS, you can pursue matter with ITD with ease. Otherwise just try to convince IT authority; but revision of ITR not possible now to get refund.
Co. said they have to deduct tax on SV more than 1Lac, @ 2%. I have received 2,3 3409 as SV.
TDS liability arises only if the surrender amount is taxable, but in your case its exempted u/s. 10(10D) of IT act.
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