Details of policy are Single Premium Paid Rs.4,90,000/- , Sum Assured Rs.5,00,000/- Period 5 years. Amount received on maturity Rs.6,73,000- 1% TDS
Benefit u/s 80C for premium paid was not taken as no return was filed in that year.
What shall be taxable amount in this case?
As per Section-10(10D) it seems the whole sum should be taxable, but logically it is hard to accept. Please Help. Thank you.
Yes Sir, that I have mentioned in my question that it seems whole amount get taxable. I am trying to know any other alternative as it would be harsh on the assessee to pay tax on 6.73 lacs in which 4.9 lacs was amount invested. Invested amount was paid from the savings from other income on which he has already paid tax, so it will amount to double taxation also.
It will on Rs.4.90 lacs which he has earned in previous years and paid premium 5 years ago out of savings (Which are after tax).
Further if he falls in 20% tax slab he will have to pay tax @ 20% on Rs.6.73 lacs which is approx Rs.1.30 lacs. He has earned Rs.1.83lacs (6.73-4.90) so his after tax gain would be only Rs.53000/- over a period of 5 years.
No, TDS @ 1% is deducted on 6.73lacs. even Section 10(10D) says whole amount is taxable.
I am also thinking the same. But amount shown as gross receipts in 26AS is Rs.6.73lacs so chances of NOTICE regarding this are higher.
Section 10(10D) specializes in offering tax deductions on claims, i.e. death and maturity benefit, which includes all forms of accrued bonuses against the respective life insurance policies. Tax deductions under this section can be availed on all types of life insurance policy claims. There is no upper limit on the claim.
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