Taxability of maturity amount

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). 

TDS and Taxbility on life insurance policy

Starting October 2014, if the amount received from a life insurance policy is more than Rs 1,00,000, on policies not covered under an exemption under Section 10(10D), then TDS @ 1% shall be deducted by the insurer LIC before making this payment.

Since LIC deducted TDS that means your policy is not covered under 10(10D).

TDS will also be deducted on bonus payments.

If the amount received is less than Rs 1,00,000, no TDS shall be deducted but the amount received shall be fully taxable for you.

You can claim credit for the TDS deducted in your Income Tax Return.

The union budget 2019 has proposed to amend the TDS on insurance policy proceeds to 5% on the amount of income comprised in the proceeds paid or payable upon maturity on or after 1st September 2019.

Kapadia

The policy is with ICICI Prudential and was bought in 2010. Premium paid for 3 years to make it paid-up.  It is not matured yet.  The question is " If the annual premium is more than 10% of  Sum assured, then the maturity amount is fully taxable" . Is this true ?

Dhirajlal's response indicate that this is true.

Please confirm

Thanks - Ignesius

There are various types of policies issued by Private insurance companies - one is ICICI Prudential.

The amendments in tax laws are also many.

The best is to seek for details from ICICI Prudential. They may provide you a copy of policy working as well as tax benefits on that policy.

Policies are so confusing nowadays the even agents do not fully and committ anything to sell products.

Refer policy documents also.
My earlier reply was more on TDS provisions on Maturity of policy as amended recently.

Ok. Thanks for you time and attention.  - Ignesius

Ok. Thanks for you time and attention.  - Ignesius