pranjalbari (Income Tax Consultants) (44 Points)
04 July 2018If Insurance prem. Amt is 3.00L(One time) made During 1.04.2010.and matured value is 4.95L on 05.04.2018 what is the tax treatment ...TDS is deducted 194DA .....what about 3.00l DEPOSIT....only difference is taxable or not And income goes to which head, how much amount.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(195640 Points)
Replied 05 July 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(195640 Points)
Replied 05 July 2018
As referred above, that is general interpretation; but read the para 10 of the notification...
10.3 The insurance policies with high premium and minimum risk covers are similar to deposits or bonds. With a view to ensure that such insurance policies are treated at par with other investment schemes, amendments have been made in section 88 and clause (10D) of section 10. The existing clause (10D) of section 10 has been substituted so as to provide that the exemption available under the said clause shall not be allowed on any sum received under an insurance policy issued on or after the 1st day of April, 2003, in respect of which the premium payable in any of the years during the term of the policy, exceeds twenty per cent of the actual capital sum assured. In view of this, the income accruing on such policies (not including the premium paid by the assessee) shall become taxable. However, any sum received under such policy on the death of a person shall continue to remain exempt. The new provision also provides that the amounts received under sub-section (3) of section 80DD, shall not be exempt under this clause.
From: Circular/910110000000000791
In view of this circular, only the net amount i.e. sum received minus premium paid should be taxable. So far, I have not come across any circular or notification refuting the provisions as stated above.
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