Income Tax on Maturity of Insurance

[sanju8486]

Hello All
Please Guide

As per IT Rule, Insurance Maturity is taxable in hands of premium is more than 10% of Insurance Amount, Posting Screenshot of Rule...

Please guide if Premium refers to Total/Cumulative Premium for whole FY or Monthly Premium ? Like if monthly premium of policy of 10 lacs is 10000 then total premium of an year is 120000(exceeds 10% of maturity), so it's maturity is taxable?

 

[sanju8486]

Hello All
Please Guide

As per IT Rule, Insurance Maturity is taxable in hands of premium is more than 10% of Insurance Amount, Posting Screenshot of Rule...

Please guide if Premium refers to Total/Cumulative Premium for whole FY or Monthly Premium ? Like if monthly premium of policy of 10 lacs is 10000 then total premium of an year is 120000(exceeds 10% of maturity), so it's maturity is taxable?

@CA Karan Agarwal @CA Afroz @CA Vivek Bukka @CA Vivek Bukka Your Valuable Guidance please .

 

[sxchzy]

i

Hello All
Please Guide

As per IT Rule, Insurance Maturity is taxable in hands of premium is more than 10% of Insurance Amount, Posting Screenshot of Rule...

Please guide if Premium refers to Total/Cumulative Premium for whole FY or Monthly Premium ? Like if monthly premium of policy of 10 lacs is 10000 then total premium of an year is 120000(exceeds 10% of maturity), so it's maturity is taxable?

think it means the total premium paid from policy start date to policy maturity
that is the tenure considered if i am not wrong

 

[sanju8486]

i

think it means the total premium paid from policy start date to policy maturity
that is the tenure considered if i am not wrong

Nahi nai.its not the case

Either it's annual premium or It means premium only..

 

[D7162]

Hello All
Please Guide

As per IT Rule, Insurance Maturity is taxable in hands of premium is more than 10% of Insurance Amount, Posting Screenshot of Rule...

Please guide if Premium refers to Total/Cumulative Premium for whole FY or Monthly Premium ? Like if monthly premium of policy of 10 lacs is 10000 then total premium of an year is 120000(exceeds 10% of maturity), so it's maturity is taxable?

Its annual premium in case of regular premium policy and Total premium in case of single premium policy

 

[CA Vivek Bukka]

Hi @sanju8486
Sorry for the late reply, i'm not active in this forum, here premium amount referred is total annual premium (if the mode of payment is monthly/quaterly/half-yearly then x12/x4/x2 of premium)

Here CBDT wants you to wait for 10 years previously it is 5 years, if there is no % restriction then everyone take a policy for claiming 80C deduction and get back the amount next year, similar restirction you will find in 80C Deduction too

"The taxpayer can claim deduction under section 80C in respect of premium on life insurance policy paid by him during the year. Deduction is available in respect of policy taken in the name of taxpayer, his spouse and his children. No deduction is available in respect of premium paid in respect of policy taken in the name of any person other than given above. Deduction is restricted to 20% of capital sum assured in respect of policies issued on or before 31-3-2012 and 10% in case of policies issued on or after 1-4-2012."