I have a ULIP policy which is more than five years old and have following details
1. Annual Premium - Rs. 75,000 (i.e. Total premium paid in last five years is 4*75,000=3,75,000)
2. Current Fund value is Rs. 4,00,000 (i.e. Profit is Rs. 25,000)
As per provisions of Sec 194DA* of the Income Tax Act, 1961 introduced vide Finance (No. 2) Act. 2014, which is related to taxation of insurance policy, 2% TDS will be deducted incase total withdrawal amount is more than 1L per annum.
In that case if I surrender the policy the insurance co. will deduct Rs.8,000 as TDS.
My questions are
1. Is the amout of profit (i.e. Rs.25,000) is taxable?
2. If YES, what will be the tax rate
3. If NO, then can I claim refund, at the time of filing income tax return?
Thanks in advace for your support
CAclubindia
