Taxation of income not exempt under section 10(10d)

As per my openion:

1) Income is taxable under head income from other sources.

2). no premium paid will be deducted from proceeds because you already enjoyed deduction u/s 80C.

Hi Roshan,

If the amount of insurance is not exempt by virtue of sec10(10D), the same would be taxable under head "Income from other sources" and no deduction of expenses are allowed under this head. Therefore the entire amound would be chargeable to tax i.e. 5,00,000.

However relief u/s 88 could be availed if following conditions are fullfilled:

i. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, is one lakh fifty thousand rupees or less, twenty per cent of the aggregate of the sums 

Provided that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2) if his income under the head "Salaries"—

 (a)  does not exceed one lakh rupees during the previous year before allowing the deduction under section 16

 (b)  is not less than ninety per cent of his gross total income, i.e before making any deductions

ii.   in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, is more than one lakh fifty thousand rupees but does not exceed five lakh rupees, fifteen per cent of the aggregate of the sums

iii. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, exceeds five lakh rupees, nil.

Hence accordingly the relief and income could be determined.

Thanks

Originally posted by : CA Saurabh Singh
	Hi Roshan, If the amount of insurance is not exempt by virtue of sec10(10D), the same would be taxable under head "Income from other sources" and no deduction of expenses are allowed under this head. Therefore the entire amound would be chargeable to tax i.e. 5,00,000. However relief u/s 88 could be availed if following conditions are fullfilled: i. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, is one lakh fifty thousand rupees or less, twenty per cent of the aggregate of the sums  Provided that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2) if his income under the head "Salaries"—  (a)  does not exceed one lakh rupees during the previous year before allowing the deduction under section 16  (b)  is not less than ninety per cent of his gross total income, i.e before making any deductions ii.   in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, is more than one lakh fifty thousand rupees but does not exceed five lakh rupees, fifteen per cent of the aggregate of the sums iii. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, exceeds five lakh rupees, nil. Hence accordingly the relief and income could be determined. Thanks

Hi sir!

Can I conclude that no deduction with regard to premium paid towards insurance is available and the gross amount is taxable?

Thanks!

yes, as the same would have been mentioned in the relief of 88.

therefore either the entire amount is taxable i.e. 5lakhs or the relief of sec 88 could be claimed on gross value i.e 5lakhs