I surrendered my Kotak Life ULIP after 7.5 years: How much tax will be deducted?

Ans: You're right, there seems to be a misunderstanding regarding the TDS deduction on your Jeevan Asha-II policy maturity amount. Here's a breakdown:

TDS on Maturity: Generally, for pre-2014 ULIPs and traditional endowment plans like Jeevan Asha-II, maturity proceeds are exempt from tax if the annual premium doesn't exceed 20% of the sum assured. In your case, the premium amount seems to be well below the 20% limit.

Possible Reasons for TDS: There could be a few reasons for the TDS deduction:

Technical Error: An error in LIC's system might have triggered the TDS deduction.
Change in Rules: While the rule generally applies to pre-2014 policies, there might have been a specific clarification or change applicable to your policy.
Recommendations:

Contact LIC: Get in touch with LIC's customer care or your agent. Explain the situation and the relevant tax rule. Request clarification on the reason for TDS deduction and explore the possibility of a refund if it was an error.
Tax Return Filing: While filing your Income Tax Return (ITR), you can mention the maturity amount received, the TDS deducted (Rs. 16,180), and the exemption clause applicable to your policy (premiums below 20% of sum assured). This will help you claim the deducted TDS amount if it wasn't justified.
Calculating Your Tax Liability:

Since the maturity amount is likely exempt from tax, you don't need to calculate any additional tax liability on it (assuming you haven't received any taxable bonuses). However, your total income for the year will determine your tax bracket (30% in your case) and the tax applicable to your other income sources.

Remember: For specific advice on your situation and the possibility of an LIC error or rule change, consulting a tax advisor familiar with LIC policies and tax rules for pre-2014 plans might be helpful.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Under old tax regime you can save upto ? 1.5 Lacs by paying insurance premium also additional ? 50K can be saved by investing in NPS, based on surplus deduction available under 80CCD(1B)

Ans: To be specific
To get clear reply & tax calculation, I suggest you to please furnish the details : ULIP Policy & Company, Period of Premium paid in years & Annual Premium amount.
Thanks.

Ans: Partial Withdrawal Tax Implications
Partial Withdrawal - Tax Implication Now:

Since your ULIP was bought before 2010, the partial withdrawal is tax-free if the premium does not exceed 10% of the sum assured (Rs 5.2 lakhs in your case).
No TDS Deducted - Treatment for Tax Filing:

If no TDS is deducted, the withdrawal is still tax-free and does not need to be treated as taxable income.
Surrender Tax Implications
Surrender of Policy - Tax Implication Now:

If you surrender the ULIP, the maturity proceeds are tax-free, as your policy was purchased in 2008, provided the premium does not exceed 10% of the sum assured.
No TDS Deducted on Surrender - Treatment for Tax Filing:

If no TDS is deducted, the surrender value is still tax-free and does not need to be reported as taxable income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in