exemption for matuared life insurance policy

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exemption for matuared life insurance policy

matuard insurance policy(10 years term) amount to be mentioned in itreturn? policy matuaring in feb.2017 .i give pan number to insurance company which telling 1% deduction? if pan number not given 20% deduction?.

Profile photo of basavaraja k Asked By: basavaraja 1 replies 0 helpful answers Last Updated: 5 months, 1 week ago
  • Profile photo of basavaraja kbasavaraja
    Participant

    matuard insurance policy(10 years term) amount to be mentioned in itreturn? policy matuaring in feb.2017 .i give pan number to insurance company which telling 1% deduction? if pan number not given 20% deduction?.

  • Profile photo of Chetan ChandakChetan Chandak
    Moderator

    From 1st October 2014, the insurance companies are required to deduct tax at source of 2 per cent from maturity proceeds of a life insurance policy if the premium paid is more than 10 per cent of the sum assured or if the amount does not qualify for exemption under section 10(10D).

    Currently, under section 10(10D) of the Income Tax Act, any sum received from a life insurer is not taxable if the premium payable is upto 10 % of the sum assured. Tax would be payable as per your tax slab if the premium exceeded the 10 per cent amount.
    However, since there was not TDS, in earlier years several assesses avoided the tax, so to bring control on this tax evasion new TDS provision was inserted.
    You should consult your tax advisor with your policy details to decide exact taxability and reporting requirement.
    I would suggest furnishing your PAN else taxes will be deducted at 20%.

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