Hi Sreekanth,
How are you doing?
I have few LIC policy taken earlier, but now I am thinking to surrender the same as I have taken term insurance for insurance need. Also to put surrender money in MF for remaining term years.
Here are the policies-
JA-149 SA-1L Premium paid for 9 years, left 12 years
MB-75 SA-1L, Premium paid for 9 years, left 11 years
JA-149 SA-2.7L, Premium paid for 8 years, left 18 years
JA-149 SA-5L, Premium paid for 4 years, left 22 years
JS-165 SA-2.5L, Premium paid for 7 years, left 8 years
New Endowment-814 SA-10L, Premium paid for 3 years, left 28 years
Would like to know if this is ok to surrender all or few? your point?
As already premiums paid for more than 2 years, so I believe tax relief granted for earlier FY will not be revoked, (correct me if this is wrong). But can I take tax relief for the paid premium for this (current FY)?
Also will there be any TDS on surrender amount received? Will that be taxable income or exempt?
Thanks,
Anuj
1 Answers
Dear Anuj,
As per income tax laws, if the policy is terminated before premiums for two years have been paid, the tax relief granted earlier will be revoked.
So, your understanding is correct.
You can claim tax deductions for the premiums paid (before surrendering, if any) during this FY.
I believe that for the policies which are held for minimum 5 years, TDS is not applicable.
You can surely consider surrendering newer policies like;
- New Endowment-814 SA-10L, Premium paid for 3 years, left 28 years
- JA-149 SA-5L, Premium paid for 4 years, left 22 years
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