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Taxability of matured value of LIC policy

Mahesh Chandra Mohapatra (189 Points)

04 August 2020

Is matured amount received of life insurance policy of LIC taxable.If yes how ?

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3 Replies

Sandeep shetty (Sr Accountant) (292 Points)
Replied 04 August 2020

Hi,

When the premium paid on the policy does not exceed 10% of the sum assured for policies issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012– any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax under Section 10(10D)

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 August 2020

When the Annual premium paid on the policy does not exceed 10% of the sum assured for policies issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012– any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax under Section 10(10D)

and if Annual Premium paid on the policy exceed the 10%,/ 20% as the case may be, than (Maturity value less all Premium Paid) is taxable as income from other sources.