Taxable income from maturity proceeds from lic

LIC MATURITY AMOUNT IS NOT TAXABLE. LIC WILL DEDUCT TDS ON THE MATURITY.

YOU CAN CLAIM THE WHOLE AMOUNT OF TDS DEDUCTED.

Please reply in the context of Finance Act 2014(introduction of section 194DA). The policy is non exempt u/s 10(10D). I am in the 30% tax bracket.

 

In that case TDS is also not applicable.

(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than—

  (a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA; or

  (b) any sum received under a Keyman insurance policy; or

  (c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on or before the 31st day of March, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured; or

  (d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured:

As per my undersatnding (As per point no. (d))  the entire amount is taxable and I will have to pay tax on that.

From 1st October 2014, your insurer will deduct tax at source of 2 per cent from maturity proceeds of a life insurance policy if the premium paid is more than 10 per cent of the sum assured.

Earlier, under section 10(10D) of the Income Tax Act, any sum received from a life insurer is not taxable if the premium payable is upto 10 % of the sum assured. Tax would be payable as per your tax slab if the premium exceeded the 10 per cent amount.

However, since there was no TDS, several assesses avoided the tax. 

The finance bill 2014 states "In order to have a mechanism for reporting of transactions and collection of tax in respect of sum paid under life insurance policies which are not exempted under section 10(10D) of the Act, it is proposed to insert a new section in the Act to provide for deduction of tax at the rate of 2 per cent on sum paid under a life insurance policy, including the sum allocated by way of bonus, which are not exempt under section 10(10D) of the Act."

It has also been proposed that no deduction under this provision shall be made if the aggregate sum paid in a financial year to an assessee is less than Rs 1 lakh. In 2012-2013 the threshold of premium payable was reduced to 10 per cent of the actual capital sum assured from 20 per cent.

Therefore, only that sum which is not exempt u/s 10(10D) is to be considered for income.

Refer form 16A for the amount credited. That will be your taxable income.

Kindly slet me know how I can claim for refund the TDS in the above cases.

Kindly slet me know how I can claim for refund the TDS in the above cases.

I am due for a maturity amount of Rs 60000/- from LIC.  As per the prevailing Income Tax Rule 194, am I entitled to get the whole maturity amout? Date of commencement of the policy is 07 Dec 2010,  Please guide me .

i hv a query if my premium is >10% of sum assured and lic invst made after 2012 april and if i hv got the maturity aftr 1% tds the amount gets reflected in 26as and it goes into 30% tax slab my query is can i deduct the amount of premium paid. from the amt of maturity fir calculation of tax only on net amt. aftr dedn of premium why shd i pay tax on my own premium amt paid to lic? so hope my query is clear? can i deduct total premiums paid by me from maturity amt ( inclusive of some meagre bonus or so cslled interest). its a 5 year endowment plan pls help. for AY 2018-19 maturity recd in FY 2017-18

i hv same query im in 30% tax bracket and maturity amt is > 100000 but is not exempt u/s10(10D) bcis premium paid p.a is >10% of sum assured so i hv to pay tax on maturity- premiums paid right??