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Mihir Tanna  |961 Answers  |Ask -

Tax Expert - Answered on Nov 21, 2023

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Asked by Anonymous - Oct 06, 2023Hindi
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Hello Sir, I have a life stage pension plan with icici prudential which i began in the year 2010 the current value of it is around 4,25,000/- due to some financial needs i want to surrender the policy.There is no surrender charge in the policy but tax will be deducted on the above value as told to me by the employee of the company.Is that tax TDS and at what rate will it be deducted? Will i be able to claim refund while filing return the next year if my income is below taxable limit?

Ans: As I understand from given facts, it is pension plan purchased through employer. Pension from employer is chargeable as Income from Salary at slab rate. Further, TDS can be claimed as refund by filing ITR, if there is no tax liability.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Will there be any tax to be paid by me for surrendering value of the life insurance policies irrespective of the tax regime? How much rate of tax is applicable for voluntarily surrendering the policy? Please answer my query because it will help me take a decision.
Ans: Yes, there could be tax implications when you surrender a life insurance policy in India, depending on the policy terms and the premium payments.

Here's a breakdown:

1. Tax Deduction Claimed under Section 80C:

If the premium paid on the policy was claimed as a deduction under Section 80C, then the surrender value could be taxable.

Conditions: For the policy to remain tax-exempt under Section 10(10D), the premium paid should not exceed 10 per cent of the sum assured (for policies issued after April 1, 2012) or 20 per cent of the sum assured (for policies issued before April 1, 2012).

2. Surrender Before Minimum Lock-in Period:

If you surrender the policy before completing the minimum lock-in period (usually 5 years), the entire surrender value becomes taxable. The deductions claimed under Section 80C in earlier years will also be reversed.

3. Tax Rates:

Old Tax Regime: The surrendered amount is added to your income and taxed according to the applicable income tax slab rate.

New Tax Regime: Since you do not get exemptions or deductions under the new tax regime, the surrender value is still considered income and taxed as per your slab rate.

4. When is Surrender Value Tax-Free?

If the premium-to-sum-assured ratio is below the threshold (10 per cent or 20 per cent as mentioned above) and the policy has been held for the full term, the surrender value can be tax-exempt under Section 10(10D).

Given that tax rates depend on your income bracket, it’s crucial to consult with a tax advisor for personalised advice.

Typically, the rate would be as per your slab rate, which could be between 5 per cent to 30 per cent, plus cess and surcharge, depending on your total income.

..Read more

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Help me!!! 1.I'm starting new "work" on my own(challenging for me) but my mind says quit it, be quite & do nothing. I myself don't know that wether the result of work will be +ive or uncompleted like alws. 2. My mind has become like order seeker type, when someone orders me, I do those things with dedicated(but sad from inside) manner. But when myself will try something different(which i fear, but necessary) then. "I QUITS IT" & sometimes I don't even start. 3. I'm like stuck no clue what/whom I want to do in life, I'm in cllg(1 yr) doing (CSE) ,. 4. I want to do/try (sports,talking girls,study,stocks,coding..) many things, but myself, my thoughts(overthinker), R like just be in the place where u are[confused,po*n,think about past/future(being billio..re,olympics..), girl (that u liked & never talked), abusive/beating self,.. sometimes feels like end life, but don't hv courage for that also.. 5. I tried self help books, spirituality, god, self affirmation, writing... & thay affected me(sometimes) but for only some time, then again that devil me comes up &these things never get completed. As no one in my family knows about all these, so that's Y ,I hv to fight/loose/try again, the battles with myself.
Ans: Dear Harsh,
If in the past you have had the urge to QUIT, how is this time going to be different? This is not to discourage you from taking up 'new work' but pointing out that there is some amount of work that you need to put to clear the mind out of blockages.
-What is limiting you?
- What is the reason for putting off things?
- What comes first to the mind when you start something new?
Also, focus on one thing at a time; study and go deep into it...what's this thing with work? I don't understand. When the mind is unsettled, take one thing/activity, pursue it and finish it. It could simply be studying for Year 1 of your college...just only do that...once your mind is trained in completing an activity, you can add another one the next year along with studying and then pursue both...it could be some sport and studying...then the next year, you could add a third activity. This is called 'training the mind in discipline'. Discipline will make sure that you start and finish things...So, go slow and do one thing at a time.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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