Taxability of Life Insurance Policy

Share
As per
section 10(10D), any amount received under a life insurance policy, including
bonus is exempt from tax. However, following receipts would be subject to tax:


 Any sum
received under sub-section (3) of section 80DD; or
Any sum
received under Keyman insurance policy; or
Any sum
received in respect of policies issued on or after April 1st, 2003, in respect
of which the amount of premium paid on such policy in any financial year
exceeds 20% (10% in respect of policy taken on or after 1st April, 2012) of the
actual capital sum assured; or
Any sum
received for insurance on life of *specified person (issued on or after April
1st 2013) in respect of which the amount of premium exceeds 15% of the actual
capital sum assured.

* Any person
who is –
i) A person
with disability or severe disability specified under section 80U; or
ii) suffering from disease or ailment as specified in the rule made under
section 80DDB.

Following
points should be noted in this regard:
Exemption is
available only in respect of amount received from life insurance policy.
Exemption
under section 10(10D) is unconditionally available in respect of sum received
for a policy which is issued on or before March 31, 2003.

Amount
received on the death of the person will continue to be exempt without any
condition.​
RECOMMENDED READ  CBDT mandates issue of nil TDS certificate to deductor and lower TDS certificate to recipient of income

Leave a Reply

Written by

Optimization WordPress Plugins & Solutions by W3 EDGE
%d bloggers like this: