Vipan kumar verma asked 3 months ago
I PURCHASED LIC SAMRIDHI PLUS SINGLE PREMIUM POLICY FOR RS ON LAC ON MAY 2011 ,NOW I REPURCHASED THIS POLICY DURING SEP.2018. LIC DEDUCTED 1% TDS WHEN I SAW 26AS CREDITED NET AMOUNT RS. 193532/- TOTAL INCOME TDS RS.1935 DEDUCTED & NET RS.191597/- CREDITED MY SB A/C. KINDLY ADVISE ME THAT MY INITIALLY INVESTMENT IS EXEMPTED FROM INCOME TAX.OR I HAVE TO TAKE RS.93532/- IN FILLING ITR. AS RECENTLY SHOWN IN RECENTLY TDS ON VARIOUS INCOME ,YOUR GOOD SELF SHOWN IN YOUR TDS FOR THE FINANCIAL YEAR 2018-19 THAT INCOME FROM LIC SHALL BE DEDUCTED 1% TDS UNDER SECTION 194DA. KINDLY ADVISE ME. IS 1% TDS DEDUCTED BY LIC IS SUFFICIENT.
Sreekanth Staff answered 3 months ago
Dear Sir,
You need to show the entire maturity proceeds as income in your ITR, disclose the already deducted TDS while filing ITR and then calculate the net tax liability (after considering your other sources of income).
Vipan kumar verma
replied 3 months ago RESPECTED SIR,
AS I INVESTED RS.ONE LAC DURING MAY 2011 STATED ABOVE. HOW MUCH REPURCHASED AMOUNT IS INCOME TAX EXEMPTION. AS IN CASE OF BANK FDR ONLY INTEREST IS TAKEN INTO TOTAL INCOME. HERE IN LIC SAMARIDHI PLUS IS UNIT BASE POLICY, DURING THE YEAR 2018 I REPURCHASED MY UNITS OF LIC SAMARIDHI PLUS. THERE MUST BE EXEMPTION OF INCOME FROM INCOME TAX & I RETAINED THE POLICY MORE THAN 7 YEARS. LIC DEDUCTED ONLY 1% TDS ON FULL AMOUNT, OTHERWISE LIC MUST DEDUCT 10% TDS FROM GAIN ON UNITS VALUE.
Sreekanth Staff answered 3 months ago
Dear Sir,
I believe that we have already discussed on this topic earlier.
”
“If the premium is more than 10% of the sum assured, any money received from a life insurance policy is fully taxable. It is usually the single premium policy which fall in this trap, since premiums are high. Check if the premium paid by you is more than 10% of the sum assured. If that is true the amount received is fully taxable.
This is true for all life insurance policies purchased after 1st April 2012.
For policies purchased between 1st April 2003 & 31st March 2012, the insurance premium you pay in a year should be less than or equal to 20% of the Sum Assured in the plan. If this condition is not met, the entire maturity proceeds will be taxable income in the year that the policy matures.
Starting October 2014, if the amount received from a policy is more than Rs 1,00,000 and it is taxable, TDS @ 2% shall be deducted by the insurer before making this payment.
If the amount received is less than Rs 1,00,000 no TDS shall be deducted but the amount received shall be fully taxable. It is taxed at income tax slab rates.”
“The only exception in this case is the proceeds from life insurance plan arising due to the death of the policyholder are exempt from tax irrespective of the level of the premium,”
You may also consult a CA in this regard.
Vipan kumar verma
replied 3 months ago Respected Sreekanth ji,
I prefer your good self more than a well qualified C.A.i.e about your knowledge etc. As I have stated that I purchased Lic Samridhi Plus on May 2011, here sum insured is Rs.1 lac 25 thousand on single premium i.e policy period 10 years. For policies purchased between 1st April 2003 & 31st March 2012, the insurance premium you pay in a year should be less than or equal to 20% of the Sum Assured in the plan. If this condition is not met, the entire maturity proceeds will be taxable income in the year that the policy matures. Here my split up premium year wise should be Rs.12500/-per annum.for sum insured but I purchased before 1st April 2012 then condition of 20% applies upto Rs.20,000/- premium P.A. apply.,but due to single premium there must be discount/rebate on policy .Actually my premium RS 10000/- if we divide by 1/10 ,my annual premium RS.12,500/- are eligible for sum assured , but as I purchased on May 2011, then 20% condition apply . Then Less than Rs.20000/- premium paid is applicable to my policy, but as per sum assured my annual premium becomes Rs.12,500/-.
So as per this formula whole income becomes tax exempted In future it shall be in future quarry also by splitting the single premium in to month wise by dividing the period with sum assured.
pradeepd
replied 2 months ago Sir,
The answer to your query lies in your 2nd statement above.
“As I have stated that I purchased Lic Samridhi Plus on May 2011, here sum insured is Rs.1 lac 25 thousand on single premium i.e policy period 10 years”
Since its a single premium policy, so you need to pay tax on the entire maturity proceedings.
Sreekanth Staff answered 2 months ago
Dear Sir,
Is your annual premium more than 20% of the Policy Sum Assured?
Sreekanth Staff answered 2 months ago
Dear Sir,
My answer remains the same : For policies purchased between 1st April 2003 & 31st March 2012, the insurance premium you pay in a year should be less than or equal to 20% of the Sum Assured in the plan. If this condition is not met, the entire maturity proceeds will be taxable income in the year that the policy matures.
AS PER YOUR REPLY FULL AMOUNT IS TAKEN IN TO CONSIDERATION WHILE FILING ITR ,BUT QUESTION IS THAT THERE IS NO EXEMPTION FROM INCOME TAX ON MATURITY AMOUNT.AS INITIALLY I INVESTED Rs.ONE LAC ON LIC SAMRIDHI PLUS, AT THE TIME OF INVESTMENT I DID NOT CLAIMED ITR REBATE U/C 80-C i.e. 2011-12 ,JUST FOR LONG TERM INVESTMENT,
KINDLY ADVISE ME FROM EXEMPTION UNDER INCOME TAX ANY MATURITY AMOUNT & UNDER WHICH ACT OF INCOME TAX. I AM VERY OLD YOUR SUBSCRIBER ,I HOPE YOU MUST GUIDE ME PROPERLY BECAUSE THIS YEAR i.e .2018-19 I WAS RETIRED FROM THE SERVICE FROM FOOD CORPORATION OF INDIA, & FILLING ITR UNDER YOUR PROPER GUIDANCE & B.COM.PASS DURING YEAR 1977-78, NOW LITTLE KNOWLEDGE OF INCOME TAX.