1) Yes you need to pay tax on the above maturities.
2) Total maturity
3) Under the head income from other sources.
Taxable amount of life insurance maturity
I got maturity of my 2 policies in FY 218-19- 1) one SBI Life Insurance where I invested 25000 yearly for 5 years (total invensted 125000) & I got Maturity Amount 130660.38. Company Deducted TDS Rs 1307. 2) second Policy was of Bajaj Allianze Life Ins , where i Invested Rs 50000 (single Premium) & I got Matuiry Rs 141160.00.Company ded TDS Rs 1412. I am Tax payer of 30% Slab. my questions are- a) Do I need to pay Tax on the above Maturities ? b) if yes then on which Amount e.g (Total Maturity Amount-Invested Amount ) ? c) how to show in Return. kindly help me Dinesh Singh Chauhan Email Id - [deleted] Mobile -[deleted]/[deleted]
Asked 6 years ago in Income Tax
Hi,
Whether the policy is taxable or not will depend upon the following factors:
1. Type of insurance policy
2. Insured amount
Further, if the policy is taxable, tax will be paid on difference of maturity amount and amount invested
Dear Sir,
Hope you are doing well !!
When the premium paid on the policy does not 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– any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax under Section 10(10D).
Taxation, where the premium paid, is more than 10% of the sum assured – Any money received from a life insurance policy, where the premium is more than 10% or 20% of the sum assured as the case may be, is fully taxable.
1.Yes, you will have to pay tax on the above maturities.
2. Total Maturity amount.
3. It should be treated as income from other sources.
Since your policies were not eligible for deduction u/s 80C you cannot claim it as exempt and therefore you need to pay tax on same.
Tax will be paid as capital gain dependent on the tenure you need to decide whether its long term or short term and calculate tax accordingly.
If you need any assistance feel free to contact.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Taxability of LIC maturity proceeds depends upon whether the premium paid exceeds 10% of the actual sum assured or not. (for policies issued after 1 April 2012)
From the data available in the question,
1. Yes, you are liable to pay on this maturity proceeds.
2. Total maturity amount would be taxable.
3. It is to be declared under the head income from other sources.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Hi
When the premium paid on the policy does not 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– then any amount received on maturity will be fully exempted from Tax.
Other wise its taxable.
Tax to be paid on Total maturity minus total premium paid=Total taxable amount. it is taxed as per your slab rate less tds deducted.
Hope it helps
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