Tax on Insurance proceeds

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..... Tax on Insurance proceeds
Query (Issue) Started By: - Tushar More Dated:- 18-2-2017 Last Reply Date:- 20-2-2017 Income Tax
Got 2 Replies
Income Tax
A client has taken 5 insurance policies of ₹ 5 Lacs each in the year 2011 by one time premium payment. Now it has received a maturity amount of ₹ 38 Lacs in current year. The client has not availed then ₹ 1 Lac deduction .....

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..... u/s 80C as it was utilized against NSC/other investment. My Query is that since the client is not eligible for deduction u/s 10(10D) since it was a one time premium payment, what is the amount that should be taxed. Is there a way to reduce the tax liability? Reply By Ganeshan Kalyani: The Reply: The premium amount was eligible to claim deduction under 80c but since your overall investment was m .....

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..... ore the eligible deduction limit you could not avail the deduction for the premium paid for the policy which matured now. So you were not disqualified to claim for the deduction but the amount invested was more. Thus you were allowed to claim. Hence again you will not be able to get deduction on the same premium amount. In my view entire matured amount is taxable. Reply By Tushar More: The Reply .....

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..... : Thank you for your reply. But i have 2 more queries realting to the same. Firstly, since my investment exceeded the exemption limit, i had made investment from my taxed income, as no deduction was allowed then. Secondly, now when i have received the maturity amount, if the whole proceed is liable for taxation, then it would amount to double taxation. Example: I invested ₹ 25 lacs from .....

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..... taxable income. Now when i received the maturity proceeds of ₹ 38 Lacs, it again gets taxed, which results in double taxation to the tune of ₹ 25 Lacs.
Discussion Forum - Knowledge Sharing .....

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