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Tds 194 da

Roshan (-) (109 Points)

22 January 2015

Hi!!!
I have a question about sec.194 da of Income Tax Act.

Suppose I took a Bhima Plus LIC plan with premium Rs. 5 lakhs. The amount I received is Rs. 9 lakhs.They have deducted TDS on the same. Then, what is the taxable amount? Rs.5 lakh or Rs. 9 lakh? Under which head should I assess the income.

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Raphael (Chartered Accountant) (214 Points)
Replied 23 January 2015

Any maturity proceeds of Life insurance policy including bonus is exempted as per sec 10(10D). Provided if the premium paid in a year is more than 10% of the sum assured, then this exemption is not available. In other cases, the bonus can be offered to tax in the year of declaration and the interest/increment if any should also be offered o tax under the head income from other source. Even though TDS is deducted on the entire amount, the entire amount is not subject to taxation.