• Pension fund pre-closure amount taxable

I am NRI,
I  taken icicipru lifetime super pension policy. paid  3 year (2007,2008,2009) 3 lakhs each.It is 10 year term. meturing  2017. now the fund valve is 19 lakhs. I paid the premium thru my NRO account. Now I want to surrender the policy before maduting. what will be the tax applicable. whether i have to pay tax?,As per the policy document section apply for the policy is 80cc 10 (10A).
please advise whether i can opt for pension or pre closure?
Asked 2 years ago in Income Tax from Chennai, Tamil Nadu
Yes the same is taxable
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

I think this is covered under 80CCC.

On maturity entire amount will be taxable.
Saket Jain
CA, Greater Mumbai
23 Answers

4.7 on 5.0

The payment in  commutation of pension received is exempt u/s 10(10A). The pension received will however be taxable. In my view you should not opt premature closure as (a) you may lose on foreclosure penalty, if any and (b) you may lose tax saving on commutation of pension. 
B Vijaya Kumar
CA, Hyderabad
845 Answers
48 Consultations

5.0 on 5.0

Yes, it will be taxable as per provisions of section 10(10A).....
Bhagyashree Kankaria
CA, Pune
30 Answers
7 Consultations

5.0 on 5.0

Dear Sir,

Yes, the amount withdrawn at the time of pre - closure is taxable. Plus penal charges may also be deducted by your Insurance Company.

So in my opinion it doesn't make sense going ahead with that option, unless you are in Urgent Need of Funds. 

Trust this clarifies your query.

Feel Free to get back for further clarifications.

Thanking You.

CA Rohit R Sharma
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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