Hi, I had purchased a single premium LIC Wealth Plus policy for Rs. 1 Lakh in 2010. It matured in 2018 and the maturity amount was around 1,40,000. Now i understand that this 40,000 has to be treated as LTCG / Income. So, the questions are: 1. Is it LTCG or is it Other Sources of Income? 2. If it is LTCG, tax should be charged only if it is more than 1Lakh, so when i put it in LTCG the 1 Lakh deduction is not happening. How do i put that 1Lakh deduction in ITR-2. 3. If it is income, how should i show this in ITR-2? Regards, Manish
Hello,
1. It would be declared as LTCG.
2. The 1 Lakh exemption is applicable to only equity shares or units of equity-oriented funds.
3. It won't be declared under Other Sources head.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Please do let me know how to put it in ITR-2. If LTCG where, and if Income from Other Sources, where? Exact ITR-2 section is what i am looking for. And whether the 40K amount is taxable or entire 1.4L, and also if i have any deductions possible, where should i put that.
Dear Manish,
Hope you are doing well !!
1.It has to be noted that LIC Wealthplus is ULIP policy and the gain realized shall be shown as Long Term Capital Gain and not as Income from other sources.
-Effective 1 April 2018, LTCG arising from the sale of listed shares and equity-oriented mutual funds are held for more than 12 months are taxable at the rate of 10% (excluding surcharge and cess), if such LTCG exceeds ₹1 lakh in the given FY, provided securities transaction tax (STT) has been paid both at the time of purchase and the sale of the shares or mutual funds.
-A ULIP is an insurance plan where the premium paid is invested in equity, debt, or money market instruments. Subject to certain conditions, the premium paid towards this policy is allowed as a deduction u/s 80C of the Income Tax Act. So, ULIP premiums can be deducted from your taxable income up to the permissible limit u/s 80C, which is currently at Rs. 1.5 lacs.
-Effective 1 April 2018, LTCG arising from the sale of listed shares and equity-oriented mutual funds are held for more than 12 months are taxable at the rate of 10% (excluding surcharge and cess), if such LTCG exceeds ₹1 lakh in the given FY, provided securities transaction tax (STT) has been paid both at the time of purchase and the sale of the shares or mutual funds.
-A ULIP is an insurance plan where the premium paid is invested in equity, debt, or money market instruments. Subject to certain conditions, the premium paid towards this policy is allowed as a deduction u/s 80C of the Income Tax Act. So, ULIP premiums can be deducted from your taxable income up to the permissible limit u/s 80C, which is currently at Rs. 1.5 lacs.
Its LTCG.
1 lakh deduction only available for equity share and equity oriented fund.
You need to find its indexed cost of acquisition.
It will be covered under point 9 of LTCG in CG tab in ITR 2.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
- Assuming actual capital assured is Rs.1.40 lacs therefore the percentage of annual premium is more than 20% resulting into taxation of taxation of Rs.1.40 lacs.
