Whose hands amount is taxable

This discussion clarifies the taxability of a LIC maturity amount. When parents pay for a policy for their minor son, and the son receives the maturity amount after becoming a major, the proceeds are generally taxable in the hands of the son as the recipient. The exemption under Section 10(10D) of the Income Tax Act may not apply in such cases, and tax may be deducted at source by the insurance company if the amount exceeds Rs 1 lakh.