Question ID : 39304

TAXABILITY OF SBI LIFE INSURANCE ON MATURITY

What will be tax treatment of amount received on Maturity under life insurance. Section 10(10D) start with the word "Any sum received including bonus............." Meaning thereby what ever amount received including the premium paid by insurer is taxable. Please provide the answer in detail.

Answer ID : 79056

If amount of LIC premium does not exceed 10% of sum assured, any amount received on maturity or amount received as bonus is fully exempt. If it exceeds 10%, only income component i.e. net income after deducting amount of insurance premium paid is taxable.

Answer ID : 79061

Any amount received under an insurance policy, if its premiuim payable in a year exceeds 10% of the capital sum assured, it will be taxable. If not exceeds 10%, it is exempted u.s. 10(10D). The total amount received is taxable as per the provisions. but under real income concept, net income can tbe taken.

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