Tax on Surrendered Life Insurance Policy

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anujtan asked 8 years ago

Hi Sreekanth, How are you doing? As per our previous discussion and your suggestion, I had surrendered my LIC policy in Jan 2018 and received Rs 1 L as surrendered amount. Queries -

Will this surrendered amount taxable in FY 2017-18?
In which section should this amount to show in ITR?

Surrendered policies - JA-149 SA-5L, Date Purchase Dec-2013, Term-26Years JS-165 SA-2.5L, Date purchase Oct-2011, Term-15Years Thanks in Advance. Thanks, Anuj

3 Answers

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Sreekanth Staff answered 8 years ago

Dear Anuj, I am doing good, thank you! How about you? You will NOT have to pay tax on the surrender value of your Policies , if:

You have paid your insurance policy premiums for at least 2 years after buying the policy.
In case of single premium policy, you have held the policy for at least 2 years.
In case of ULIPs, this term is minimum 5 years.

anujtan replied 8 years ago

Thanks Sreekanth.
So where should surrender value to show in ITR form?

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Sreekanth Staff answered 8 years ago

Related Article : 8 ways you could lose your Income Tax Benefits

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Sreekanth Staff answered 8 years ago

Dear Anuj, You can declare it under Exempt income section of your ITR.