Question ID :
44933
Capital gain on LIC maturity
A person has received maturity amount after completion of tenure from LIC Whether Capital gain tax will be applicable
Posted by
Mahesh Kumar
on
Nov 11, 2025
Filed Under
DIRECT TAXES
Section 10(10D) of the Income Tax Act exempts any sum received under a life insurance policy, including bonuses, from income tax, provided the premium paid does not exceed 10% of the sum assured (for policies issued after 1 April 2012) or 20% (for policies issued before 1 April 2012). This applies to ULIPs, endowment policies, and traditional life insurance, subject to specific conditions.
Posted by
SIVADAS CHETTOOR on
Nov 12, 2025
Answer ID :
86020
No, capital gains tax does not apply to maturity proceeds of a life insurance policy.
Instead, the taxation depends on Section 10(10D) of the Income Tax Act.
Maturity proceeds from LIC are fully exempt if ALL the following conditions are satisfied:
? Condition 1 – Policy issued before 1 April 2012
Premium = 20% of Sum Assured in any year
? Maturity is fully exempt
? Condition 2 – Policy issued on or after 1 April 2012
Premium = 10% of Sum Assured in any year
? Maturity is fully exempt
? Condition 3 – For persons with disability (Sec 80U) or disease (80DDB)
Premium = 15% of Sum Assured
? Maturity is fully exempt
? Condition 4 – Death Claim
All death-related payouts are always exempt, even if above limits.
Posted by
CA. JHA SHANKAR KUMAR on
Nov 17, 2025