Tax effect on insurance policy

I have taken Unit Linked Insurance Policy for 10 years, I have paid premium of 1 lakh for seven years. Lock in period was 5 years. I surrendered my policy after seven years and received Rs.10,32,000 against 7 lakhs paid as premium. What will be the Tax Effect??

Replies (5)

What was the actual date of purchase of policy?

What was 'Assured value' of the policy?

Any TDS deducted by insurer over surrender value?

Sir we purchased it on 17-03-2011, the assured value is 14,50,000, and no TDS was deducted.

 1. "As per section 10(10D) in case of a life insurance policy issued after 1.4.2003 but on or before 31.3.2012 if the premium payable in any year exceeds 20% of the actual sum assured, then the policy proceeds would be taxable in the hands of the insured "

In your case this condition is not satisfied...... So......

"As per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions. "

Means, total surrender value.... Rs. 10,32,000/- is tax-exempt.

Thanks alot Sir. That was very much helpfull.

My Pleasure...

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