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 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?
Client's Insurance Maturity Amount Fully Taxable Due to Ineligibility for Section 10(10D) Deduction; Concerns of Double Taxation Raised. A client invested in five insurance policies with a one-time premium of 5 lakhs each in 2011, receiving a maturity amount of 38 lakhs. The client did not claim a deduction under section 80C as it was used for other investments. The question raised was about tax liability since the client is ineligible for section 10(10D) deduction due to the one-time premium. A response indicated the entire maturity amount is taxable because the premium was not deductible earlier due to exceeding the investment limit. The client expressed concern about potential double taxation since the investment was made from taxed income. (AI Summary)
TaxTMI 
TaxTMI 
