TDS on maturity payment of LIC of india

LIC of India does not deduct TDS on maturity payments of policies taken before April 1, 2016, if the premium paid doesnot exceed Rs.1.5 lakh in a financial year and certain other conditions are met. 

Can you please state the 'other conditions'

That you have mentioned 

If the premium payment in any year does not exceed 20% of the sum assured, there will not be any TDS deduction.

SEC 10(10) D EXEMPTION IS THERE.

Disclose sum assured and other details to ascertain correct figure

Disclose sum assured and other details to ascertain correct figure

1. Section 10(10D) Exemption Criteria:

For policies issued before 1st April 2012 (your policy falls in this category), the maturity amount is EXEMPT from tax if the premium paid in any year does not exceed 20% of the sum assured.

2. TDS Applicability:

- If the above condition is met (premium ≤ 20% of sum assured), No TDS will be deducted by LIC and the maturity amount is fully tax-exempt.

- If the condition is not met (premium > 20% of sum assured), then Section 194DA applies and TDS @ 2% will be deducted, provided the total payout exceeds ₹1 lakh.

The 1.5 lakh limit is relevant only for certain ULIPs issued after 1st February 2021. For your policy (Feb 2000), only the 20% premium-to-sum-assured ratio matters.

Recommendation:

Please check if your annual premium paid was within 20% of the sum assured. If yes, no TDS will be deducted and the maturity is tax-free. If not, LIC will deduct 2% TDS on the income portion.