Invested a sum of 200000/- as single premium for LIC’s Wealth Plus Policy on 10 March 2010. Policy terms covered life risk for 10 years with sum insured 250000/-.
Policy matured on 10 March 2018 based on 8 year term with extended life cover until 10 March 2020. Received a net sum of 162270/- after TDS deduction of 1639/- on 21 March 2018.
Deduction of 150000/- was claimed u/s 80C for AY 2010 -11.
Question – is there a tax liability for AY 2018-19.
Tax payer is 72 years old.
If that is the only income in FY 2017-18, no tax liability. You can get refund of the TDS deducted..
Tax liability over the aggregate income including the maturity proceeds to be assessed.
for a possible benefit of mere Rs. 50000/- (in case of death) and Rs. 10300/- tax saving u/s 80C in AY 2010-11 (with tax slab of 10% and max deduction of Rs. 100000/- u/s 80C), tax liability of 50648/- (tax slab of 30%) for AY 2018-19 seems to be very unfair deal for a senior citizen. On top of it a loss of Rs. 36091/- was caused on payment of maturity value after 8 years.
CAclubindia
