• Tax under 194a

I had a IDBI I LIC POLICY with single premium of 500000 TAKEN IN 2008. I did a partial withdrawal of 384000RS IN 2013. IN 2018 I have recieved maturity payment of 334802 RS. How much premium can i deduct to get the taxable income. Can i deduct ([deleted]) 118802.
Asked 5 months ago in Income Tax from Bangalore, Karnataka

- Why you will get deduction of the premium this year?

- Please check Form 26AS for any TDS deduction by the IDBI. If the TDS is deducted then Rs.3,34,802 will be taxable. 

 

Vivek Kumar Arora
CA, Delhi
3162 Answers
162 Consultations

5.0 on 5.0

Hello,

 

Taxability of LIC maturity proceeds depends upon whether the premium paid exceeds 20% of the actual sum assured or not. (for policies issued after 1 April 2003 but before 31st March 2012)

No deduction for premium paid is allowed.

If TDS is deducted on this maturity proceeds, then the whole maturity proceeds would be taxable.

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1063 Answers
3 Consultations

5.0 on 5.0

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.

 

So, you will have to pay tax on total maturity amount i.e. 3,34,802/-

 

 

Payal Chhajed
CA, Mumbai
3165 Answers
41 Consultations

5.0 on 5.0

Have you paid capital gain tax on such partial withdrawal?

You can take deduction in proportion to the amount you have received and index it and calculate capital gain.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
2216 Answers
19 Consultations

5.0 on 5.0

You need to check what have you done in 2013. At that time, how much premium you had deducted. If you have not deducted anything at that time, you can deduct 5 lacs now from the total amount received.

Lakshita Bhandari
CA, Mumbai
3794 Answers
189 Consultations

5.0 on 5.0

Hi

Taxable amount = Total maturity receipts minus total premium  paid.

 

Hope it helps

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

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