income tax on lic maturity

[Satbir singh wahi]

One time LIc premium Nov 2004 ₹ 575000

Maturity Amount ₹ 970000 received on Jan 2015 TDS ₹ 19500

What is taxable amount.

[Ganeshan Kalyani]

Lic maturity amount should be tax free u/s 10 (10D). Please check with the branch.

[Satbir singh wahi]

Since the single premium exceeds 10% of sum assured . The maturity Rs, 970000 will be taxable as tds deducted also.also.

[Satbir singh wahi]

Pls guide whether taxable amount will be 970000

or

395000 (970000-575000) i.e maturity amount less premium paid

[Satbir singh wahi]

Sir

PLs reply to query

[Ganeshan Kalyani]

In my view entire maturity amount will be the taxable amount for TDS purpose and not the net amount because on the premium amount so paid you have already benefited under section 80C at the time of investment. Hence no dual benefit and total maturity is subject to tax. Thanks.

AI Summary

Taxability of insurance policy maturity: full proceeds treated as taxable for TDS where premium previously claimed as deduction.
The thread contrasts a claim of exemption on policy maturity with the view that the entire maturity is taxable for TDS because the single premium exceeded a qualifying threshold and the premium had earlier been claimed as a deduction, leading to the practical conclusion that the full maturity proceeds were subject to TDS to avoid double benefit.