TDS on Insurance premium

[Raj Malik]

Whether TDS be deducted on Insurance premium ??

[Sarveshwar Mundra]

Yes, as per section 194D of the I.T. Act 1961

[YAGAY andSUN]

NEW SECTION 194DA

According to the new Act introduced now, tax shall be deducted at source (TDS) on payouts to Resident Indian customers if the cumulative payout across all policies which are not exempt under section 10(10D) equals or exceeds ₹ 1 lakh in a financial year.

• In case PAN is available and valid, 2% TDS will be applicable.
• In case PAN is invalid or not available, 20% TDS will be applicable!

In case your life insurance policy qualifies for Sec 10(10D), no TDS will be deducted.

AI Summary

TDS on Insurance Premiums: Section 194D and 194DA Clarify Applicability and Rates Based on PAN and Exemptions A query was raised regarding whether Tax Deducted at Source (TDS) should be applied to insurance premiums. One response cited Section 194D of the Income Tax Act 1961, affirming TDS applicability. Another response referenced the new Section 194DA, indicating that TDS applies to payouts exceeding 1 lakh in a financial year for policies not exempt under Section 10(10D). If a valid PAN is provided, a 2% TDS rate applies; otherwise, a 20% rate is applicable. No TDS is deducted if the policy qualifies for the exemption under Section 10(10D).