Section 10(10D) benefit under the new legislation, Income Tax

[Rahul Bagaria]

Hi

I need the following clarifications

1) Definition of insured event : does it mean only eventuality (death/ PTD/ CI, etc) or also means maturity event

2) Can riders SA be included towards Capital Sum Assured (eg. A person takes a endowment product with 1 Lakh SA, and premium Rs. 15,000/-; not eligible for 80 C and 10 10 D under new laws; so to make it tax compliant, he takes a term rider with 1 L SA and premium of Rs. 200/- i.e the death benefit payable during the policy is Rs. 1 L + 1 L (Rs. 2 L) and the annual premium will be Rs. 15,100/-.

This concept will be tax compliant and what changes will have to be done to First Premium Receipt for the same

2 a) in the case mentioned above, what will the understanding if the customer wants to opt out of rider after year 1. Ideally the customer can opt in/ opt out during policy anniversary, but here as this rider will be madatorily attached (without making it inbuilt to the product), can we enforce the option of not exiting once rider is selected

Thanks

Rahul Bagaria

Posts / Replies

[CA GOPALJI AGRAWAL]

Actual capital sum assured does not include bonus and value addition.