2022 (10) TMI 846

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....0/- relating to amount received on maturity of insurance policy as appearing in Form No.26AS. 3. Briefly stated, the facts of the case are that the assessee filed her return, which was processed u/s.143(1) by the Centralised Processing Centre, Bengaluru making adjustment, inter alia, of Rs.11,76,000/-. This adjustment was made on the reason that Form No.26AS reflected a receipt of Rs.12,07,419/- from Star Union Dai-Chi Life Insurance Company Limited with the amount of tax deducted at source to the tune of Rs.12,075/-, which was not included in the total income. There was another transaction reflected in Form No.26AS with negative interest income anent to Bank of India amounting to Rs.31,419/-. The adjustment was made u/s 143(1) of the Ac....

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....total income under clause (10D) of section 10, shall, at the time of payment thereof, deduct income-tax thereon at the rate of one per cent:' 5. A careful circumspection of the provision divulges that any person responsible for paying any sum under the life insurance policy, except the amount exempt u/s.10(10D), shall deduct tax at source at the rate of 1% of the sum. 6. The ld. AR pointed out that section 194DA uses the expression 'any sum' in contrast to the expression 'any income' used in certain other sections including section 194D. Since section 194DA talks of 'any sum' and not 'any income', the ld. AR contended that section 143(1)(a)(vi) using the expression `addition of income' cannot be applied to the facts of the case. 7.....

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....on of income. As against section 194DA requiring deduction of tax at source on the gross sum payable but towards income element, section 143(1) mandates the addition of income and not of the gross sum. 9. It has been noticed supra from the language of section 194DA that deduction of tax at source is contemplated on the sum payable under a life insurance policy other than the amount not includible u/s 10(10D) of the Act. Relevant part of the latter section runs as follows: Rs. 10(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than-...... (c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on or before the ....

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....lanatory notes on the provisions relating to Finance Act, 2003. The Board has clarified the position regarding section 10(10D) in para 10.3 reading as under: Rs. 10.3 The insurance policies with high premium and minimum risk covers are similar to deposits or bonds. With a view to ensure that such insurance policies are treated at par with other investment schemes, amendments have been made in section 88 and clause (10D) of section 10. The existing clause (10D) of section 10 has been substituted so as to provide that the exemption available under the said clause shall not be allowed on any sum received under an insurance policy issued on or after the 1st day of April, 2003, in respect of which the premium payable in any of the years....