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Ramalingam

Ramalingam Kalirajan  |4060 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
M Question by M on May 21, 2024Hindi
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Thanks, Is enhanced survival benefit of LIC Jeevan Asha 2 policy with option 2 tax exempt or taxable?

Ans: The enhanced survival benefit under Option 2 of LIC Jeevan Asha 2 is considered taxable income in India. Here's why:

Option 2: This option allows you to withdraw a lump sum amount for meeting hospital expenses in case of a surgical procedure.

Income Tax Rules: According to the Income Tax Act, any money received under a life insurance policy, except for the maturity benefit or death benefit, is considered taxable income. This includes benefits received for specific situations like critical illness or surgical procedures.

Therefore, the enhanced survival benefit withdrawn under Option 2 will be added to your mother-in-law's taxable income for the year.

It's essential to consult with a tax advisor or Certified Financial Planner (CFP) to understand the specific tax implications based on your individual circumstances and prevailing tax regulations. They can provide personalized guidance tailored to your financial situation and help you make informed decisions regarding your insurance policy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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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Ramalingam

Ramalingam Kalirajan  |4060 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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Hello Sir, on 28/09/2003., I have purchased Jeevan Asha - II (Plan-131) with sum assured of Rs. 500000 (five lakh) for Half-Yearly Premium of ? 16,917.00 (annual premium of ? 33834). I had paid all the instalments and policy matured on 28/09/2023. lic paid me maturity amount with deduction of Tax (TDS-194DA) of ? 16,180 on (? 3,23,600 a part of maturity amount) on 8/09/2023. The calculation of maturity amount by LIC was as follows: 1. Basic amount ?400000 2. Bonus ?700000. 3. Any other RCT. ? 251800. 4. Total ? 1351800. 5. Income tax ? 16180 on ? 3,23,600. Paid in my bank account ? 1345620. Sir, Why LIC have deducted TDS? (the annual premium was less than 20% of Sum assured and the policy commenced in September 2003 and there is no tax on maturity on these policies). Sir, how to calculate my tax liability considering me in higher bracket of 30%. Thanking you.
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

..Read more

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CAT, XAT, CMAT, CET Expert - Answered on Jun 26, 2024

Asked by Anonymous - Jun 22, 2024Hindi
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I graduated with a B.Com (General) with 73.52%, and I obtained 54.71% in 10th grade and 51.17% in 12th grade. I belong to the General category and am eligible for an EWS certificate. My academic profile is summarized as 5|5|7. Since graduation, I have been a fresher with no practical work experience or internships, and I do not have any notable co-curricular or extra-curricular achievements. I took the CAT 2022 exam shortly after graduation for experience. Following that, I started preparing for CAT 2023, XAT 2024, and MHT CET 2024 but was unsuccessful due to a lack of consistency, discipline, and dedication. This year, I am preparing for CAT, NMAT, SNAP, XAT, MHT CET, and CMAT with the goal of getting into a top B-school in India. My preparation is going well this time. Although I realize I may not get into the top IIMs (BLACKIS), I am targeting and working hard for the new and baby IIMs, XLRI, FMS, SPJIMR, NMIMS, SIBM, and other reputable non-IIMs. Many people have advised me to pursue an MBA from local colleges or to try for government or banking jobs. While I respect their suggestions, I am determined to pursue an MBA from a top college in India. I cannot change my past academic record, but I am focused on improving my overall profile. I seek your valuable guidance on how to justify my gap years, improve my profile, and get advice for GDPI, securing a SIP, and placement. Currently, I am only able to get job of BPS in MNCs with only 11k p.m. for night shift. It may affect my schedule my preparation and work culture will be hectic and will only get 1.5 to 2hrs on weekdays for preparation. If I able to get a sales/Marketing related to my career interest then i can max 14k with more hectic work and more travel which may results inconsistency in preparation in weekdays. Even if I start working now, I can only add about 2 months of work experience before CAT and other MBA entrance test registrations, and less than 10 months of work experience before GDPI next year. I am committed to achieving a 99+ percentile this time. Alongside my preparation, I have acquired two beginner-level certifications in digital marketing and plan to add up to five more certifications in pre-MBA relevant skills. I am highly grateful for your feedback and suggestions.
Ans: It may be a little difficult to get into top colleges based on your academics - though it is possible if you do well in the written test and interview. It will help if you look at more colleges for admission. IF you are ready to wait then can take up a job and try to get experience along with preparation for CAT. By next year you would have 1 year experience which would give you some additional marks that could help you get a call.

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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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