I was wondering if there is tax computed on LIC returns (be it final maturity or mid-term returns like money-back policies)? Are they taxed at all? If yes, under what - as other income? Is the tax on the basic sum also (in case of final maturity) or only in case of vested bonus only? If yes, how is this handled for money-back policies?
Thanks in advance.
Prasanth
My dear friend, LIC maturity proceeds of all types is exempt u/s. 10(10D). It will be taxed, if the premium amount exceeds 20% of the sum assured.
By "premium" do you mean the vested bonus? All I get at maturity is sum assured+bonus...
I have a Jeevan Kishore policy which matured just now; the sum assured was 25000 and the vested bonus is around 26000. Is either of these taxed? If yes, at what %?
As per Section 10(10D) proceeds from Life Insurance Policy means, Any sum received under a life Insurance policy including the "sum allocated by way of bonus on such policy". This exemption doesnot apply to any amount received -
(a) under the scheme referred to in Sec.80DD or Sec.80DDA;
or
(b) under a keyman insurance policy including bonus thereon;
or
(c) under an insurance policy issued in respect of which the premium payable for any of the years exceeds 20% of the actual capital sum assured.
However, if the amount is received on the death of a person, exemption shall be available for the entire amount without any restriction.
Thanks Sriram...
I want to know what is the tax we have to pay in different policies of lic.
I want to know, what is the tax we have to pay on maturity in different policies of lic.
Dear Prabhat sir,
Please refer 2 Srirams answer here..in those case only tax on LIC proceeds need to be paid..or els its exemt US 10(10D)
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