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Tax implication on lic matured amount
Hi, my father had invested in LIC children moneyback policy long time back. Now the matured amount will be getting credited to my bank account. What would be the tax implication of this? I want to use this amount to support my family expenses. Will it be a wise decision to transfer this amount to a Liquid/Debt Fund with quarterly div payout option OR a tax saver elss fund?
Replies (1)
Generally, the proceeds on maturity or upon surrender of the policy are tax-exempt under Section 10 (10D).
In case the proceeds are taxable, LIC will deduct 2% TDS from the maturity amount. The provision will not be applicable in cases where the proceeds from a life policy in a year are less than 1 lakh.
No need to invest in 3 year lock in periof of ELSS, unless you want to save tax u/s. 80C. For more options take advice of any investment expert.
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