2023 (8) TMI 879

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....x the gross redemption amount of insurance policies as income from other sources instead of treating the same as long term capital gain after deducting the indexed cost of the investment of the assessee from the gross redemption amount. 2. That the learned CIT(A) is wholly misconceived in stating that the assessee has claimed the entire redemption amount as tax free under section 10(100) of the Act. 3. That the learned CIT(A) has grossly failed to appreciate that the assessee has offered the long term capital gains on the redemption amounts for taxation after claiming the index cost in his computation of income. 4. That the authorities below are absolutely wrong in taxing the amount of cost of investments made by ....

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....y the assessee. The lower authorities have declined the claim of the assessee on the basis that section 10(10D) of the Act, does not provide exemption in the case where the premium paid exceeds the pecuniary limits. Therefore, entire receipt ought to have been offered as "income from other sources". It is the case of the assessee that since it was a long term investment would be taxed under the head "capital gains". Ld.CIT(A) decided this issue by observing as under:- 5. DETERMINATION AND DECISION 5.1. "The grounds of appeal taken by the appellant are against the action of the Assessing Officer on account of addition/adjustment of gross redemption amount of Rs. 7,20,424/- from insurance policies as income from other source....

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....circumstances- 1. Any sum received under section 80DD(3) of the Income Tax Act. Any sum received under section 80DDA(3) of the Income Tax Act. 2. Any amount received under the Keyman Insurance Policy. Please note 'Keyman Insurance Policy' means the life insurance policy taken by a person- On the life of another person who is (or was) the employee of the first mentioned person; or On the life of another person who is (or was) connected, in any manner, with the business of the first mentioned person. 3. Any sum received under an insurance policy, if the following criteria are satisfied- 1. The insurance policy issued on or after 1st April 2003 but on or before 31st March 2012. The premium payable, e....

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.... exemption u/s 10(10D) of the Act. Section 10(10D) provides exemption qua the life insurance schemes. It is pertinent to note that a new provision has been inserted w.e.f. 01.04.2021 by Finance Act, 2021 i.e. Section 45(1B) of the Act which reads as under:- 45(1B) "Notwithstanding anything contained in sub-section (1), where any person receives at any time during any previous year any amount under a unit linked insurance policy, to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof, including the amount allocated by way of bonus on such policy, then, any profits or gains arising from receipt of such amount by such person shall be chargeable to inc....