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Tds lic maturity amt

Pramod Sen (Advocate ) (156 Points)

26 July 2020

one of my client got LIC maturity of on which 1% tds has deducted by LIC.

so now what amt has to taken as taxable income from other sources.

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18 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

Maturity Amount less all Premium paid by you is taxable as income from other sources. and you can claim TDS which is deducted in your IT return

Nidhi (Chief Accountant) (3150 Points)
Replied 26 July 2020

Is LIC maturity taxable?

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

Yes, When the premium paid on a policy exceeds 10% of the sum assured for policies issued after 1 April 2012, and 20% of the sum assured for policies issued before 1 April 2012, any amount received on maturity of a life insurance policy is fully taxable.
In other case it's exempt.

Pramod Sen (Advocate ) (156 Points)
Replied 26 July 2020

But 26as income should match with income tax tax, then how it is possible ??

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

Yes, It's required to be matched
But in case of maturity of policy 26AS suppose to show total maturity amount where as taxable income is Maturity amount less all Premium paid, you are required to show that in your Income, there is no need to match
if it's nature before 01.09.2019 than its the case.

Pramod Sen (Advocate ) (156 Points)
Replied 26 July 2020

What if after 1.09.2019

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

If your policy matures before 01.09.2019 than its happen (i.e mismatch)
You maturity is before or after?

Pramod Sen (Advocate ) (156 Points)
Replied 26 July 2020

After It was in Dec

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

If it's in in December 2019, than TDS deducted is 5% of Maturity value less all Premium paid i.e taxable value.
Pls check..

Pramod Sen (Advocate ) (156 Points)
Replied 26 July 2020

Thank you so much

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

You'r most welcome

Raghavendra Kamath (164 Points)
Replied 26 July 2020

Full maturity or surrender value is taxable without deducting premiums paid under the policy. Because premium up to 10% of capital sum assured is assumed to be taken under 80c in the year of premium payment

CA ABHAY GUPTA (Practice) (3230 Points)
Replied 26 July 2020

"Maturity and bonus amount for insurance is exempt under Sec 10 (10D). However, when the premium paid on the policy exceed 10% of the sum assured for policies issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012- it is taxable fully as per the person's tax slab, Thus there is no escape from tax on insurance proceeds if the premium paid exceeds 20% or 10% or 15% of the sum assured.
As per Union Budget 2019 wef 01.09.2019 tax at the rate of 5% will be deducted on net income i.e. maturity amount minus all premiums paid thus only the differential amount is taxable

Raghavendra Kamath (164 Points)
Replied 26 July 2020

I doubt for TDs purpose only it is net sum assured but for computation in the return full proceeds is taxed. The amount gets reflected in OS schedule from forn 26AS

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