9911796707
TMI BlogGuidelines under clause (10D) section 10 of the Income-tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall be available only with respect to such policies where the aggregate premium does not exceed ₹ 2,50,000 for any of the previous years during the term of any of those policies. Sixth proviso provides that the fourth and fifth provisos shall not apply in case of sum received on death of the person. 3. Seventh proviso to the said clause (10D) also empowers the Central Board of Direct Taxes (Board) to issue guidelines, with the previous approval of the Central Government, in order to remove any difficulty which arises while giving effect to the provisions of the said clause. In exercise of the powers under this proviso, Board, with the previous approval of the Central Government, hereby issues the following guidelines. 4. Sum received including any sum allocated by way of bonus (hereinafter referred as "consideration") during the previous year (hereinafter referred as "current previous year") under any one or more ULIPs issued on or after 01.02.2021 (hereinafter referred as "eligible ULIP") shall be exempt under clause (10D) of section 10 of the Act, subject to the satisfaction of other provisions of said clause. The same are explained by way of examples of different sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 of the Act shall be determined as under: i. If the assessee has received consideration, during the current previous year, under one eligible ULIP only and aggregate amount of premium payable on such eligible ULIP and old ULIPs does not exceed ₹ 2,50,000 for any of the previous year during the term of such eligible ULIP, the consideration under such eligible ULIP shall be eligible for exemption under the said clause (10D); ii. If the assessee has received consideration, during the current previous year, under one eligible ULIP only and aggregate amount of premium payable on such eligible ULIP and old ULIPs exceeds ₹ 2,50,000 for any of the previous year during the term of such eligible ULIP, the consideration under such eligible ULIP shall not be eligible for exemption under the said clause (10D); iii. If the assessee has received consideration, during the current previous year, under more than one eligible ULIPs and aggregate of the amount of premium payable on such eligible ULIPs and old ULIPs does not exceeds ₹ 2,50,000 for any of the previous year during the term of such eligible ULIPs, such consideration shall be eligible for exemption under the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h satisfies all the conditions laid down in clause (10D) of section 10 of the Act (other than the conditions provided under the fourth and fifth proviso of the said clause, applicability whereof is being explained in the example). The assessee did not receive any consideration under any other eligible ULIPs in earlier previous years preceding the previous year 2031-32. ULIP A Date of issue 01.04.2021 Annual premium (Rs) 2,50,000 Sum assured (Rs) 25,00,000 Consideration received as on 01.11.2031 on maturity 32,00,000 Taxability as per fourth proviso to clause (10D) of section 10 of the Act: The consideration received will be exempt under clause (10D) as the provisions of fourth proviso will not apply since the annual premium payable on the policy does not exceed ₹ 2,50,000. Example 4: The assessee has the following policies all of which satisfy all the conditions laid down in clause (10D) of section 10 of the Act (other than the conditions provided under the fourth and fifth proviso of the said clause, applicability whereof is being explained in the example). The assessee did not receive any consideration under any other eligible ULIPs in earlier previous years p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under any other eligible ULIPs in earlier previous years preceding the previous year 2030-31 ULIP X A B C Date of issue 01.04.2020 01.04.2021 01.04.2021 01.04.2021 Annual premium (Rs) 2,50,000 1,00,000 1,50,000 3,00,000 Sum assured (Rs) 25,00,000 10,00,000 15,00,000 30,00,000 Consideration received as on 01.11.2030 on maturity 30,00,000 Consideration received as on 01.11.2031 on maturity 12,00,000 18,00,000 34,00,000 Taxability as per fifth proviso to clause (10D) of section 10 of the Act: * The consideration under ULIP "X" will be exempt under clause (10D) as the policy has been issued before 01.02.2021 and it is not covered by recently introduced provisions. * The consideration received under ULIP "C" will not be exempt under clause (10D) as per the provisions of fifth proviso since aggregate of the annual premium payable for ULIP "A", ULIP "B' and ULIP "C" exceeds ₹ 2,50,000 during the term of these policies. * However, the consideration received under ULIPs "A" and "B" shall be exempt under clause (10D), since aggregate of annual premium payable for these two policies does not exceed ₹ 2,50,000 for any previous year during the te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10 of the Act: * The consideration under ULIP "X" will be exempt under clause (10D) for the previous year 2031-32 since the annual premium does not exceed ₹ 2,50,000. * The consideration received under ULIP "B" only will be exempt under clause (10D) during the previous year 2032-33 while consideration received under ULIPs "A" and "C" will be taxable as per the provisions of fifth proviso. * The exemption is restricted to consideration under ULIP "B" since aggregate of the annual premium payable for the ULIPs "X" and "B" together did not exceed ₹ 2,50,000 for any of the previous years during the term of ULIP "B". * Here instead of ULIP "B", we could have taken ULIP "A" as the aggregate of annual premium payable for ULIPs "X" and "A" is also less than ₹ 2,50,000 during the term of these ULIPs. However, since including ULIP "B" instead of ULIP "A" is more beneficial to the assessee, ULIP "B" has been considered for exemption. Example 9: The assessee has the following policies all of which satisfy all the conditions laid down in clause (10D) of section 10 of the Act (other than the conditions provided under the fourth and fifth proviso of the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder value of ULIP "X" and consideration received under ULIP "Y" on maturity will be exempt under clause (10D) since the annual premium does not exceed ₹ 2,50,000 during the term of these policies. * The consideration received under ULIPs "A", "B" and "C" will be taxable under clause (10D) as per the provisions of fifth proviso to the said clause (10D) since aggregate of the annual premium payable for the ULIPs "X" and "Y" for the previous yea₹ 2021-22 to 2025-26 was ₹ 2,00,000. If the annual premium of ULIP "A" or "B" or "C" is added then the aggregate of the premium will exceed ₹ 2,50,000 for the previous yea₹ 2022-23 to 2025-26. * As per the provisions of fifth proviso, in case of multiple ULIPs, the aggregate of the premium payable for all the policies which are claimed to be exempt under clause (10D) shall not exceed ₹ 2,50,000 for any previous year during the term of any of the policies. Example 11: If in Example 10, the assessee does not claim exemption with respect to the surrender value of ULIP "X", then the consideration received under ULIP "Y" will be exempt for the previous year 2031-32 and the consideration received under ULIP " ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
