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Tax on proceeds of insurance policy taken abroad

Tax queries 412 views 1 replies

Ashish Shah

Senior General Manager

58 Points Joined February 2010

Hello everyone,

I have a question about tax treatment on Proceeds of Life Insurance policy taken aborad.

I had taken one Life Insurance Policy in Germany long back. (Say about 15 years back). The premium was paid in cash till date. (Nominal premium of about Euro 800 per year) This amount was not reflected in any of my Income tax return.

Now, the said policy is due (endowment policy) & I am expecting the proceeds soon.

Can you please let me know if this amount is taxable? (Normally, proceeds of Life Insurance policy is exempted under Section 10. But , in this case, the proceeds are expected from Germany against a policy taken there.

Thanks

Ashish M Shah

Replies (1)

Karan Teli

Life Is just an Illusion...!!

4573 Points Joined August 2010

one view is that if the amount is taxable then there shall be a special consideration to DTAA between india and germany and apart from this the offer document plays a very important role so go thru the offer document and check for its treament. The answer depends on case to case and policy to policy since if it is taxable in indian then it need not be taxable at germany and vice versa.

Other view is that this are called life products and u need to declare and file a return of income at germany.

Refer https://www.ailo.org/help/germany.pdf for further assistance and clarifications in transparant manner.