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Ramalingam Kalirajan |8626 Answers |Ask -Follow

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

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Therefore, the enhanced survival benefit withdrawn under Option 2 will be added to your mother-in-law's taxable income for the year.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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Question by Aditya - Nov 02, 2023Hindi

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Sir, I have Jeevan Anand Policy of LIC that is matured in Oct'23 and I have received Maturity Amount of Rs. 2.12 L. Is it taxable income and required to show in my ITR. Please reply

Ans: The LIC Jeevan Anand policy provides tax benefits to the insured individuals on the premium paid, as well as on the claims that are received.

This benefit is applicable under Section 80C and Section 10(10D) of the Income Tax Act. Any income received by you is required to be reflected in the ITR, even if tax-free, in the suitable column of ITR.

Ramalingam Kalirajan |8626 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 26, 2024

Question by M - May 21, 2024Hindi

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Is enhanced survival benefit of LIC Jeevan ASHA 2 Table 131 option 2 tax exempt or taxable on maturity?

Ans: The enhanced survival benefit of LIC Jeevan Asha 2 policy with option 2 is likely taxable on maturity.

Here's why:

Income tax rules in India generally consider money received under a life insurance policy, besides the maturity benefit or death benefit, as taxable income. This includes benefits received for specific situations like critical illness or surgical procedures.

The enhanced survival benefit under option 2 is essentially a lump sum amount withdrawn before the policy matures. It's meant to be used for meeting hospital expenses in case of emergencies.

Therefore, this benefit falls under the category of money received before maturity and is likely taxable.

Recommendation:

It's advisable to consult a tax advisor for specific guidance on your situation. They can consider your tax bracket and other factors to determine the exact tax implications of availing the enhanced survival benefit.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Mihir Tanna |1054 Answers |Ask -Follow

Tax Expert - Answered on Jul 31, 2024

Question by Kamal - Jul 23, 2024Hindi

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After the LIC (policy table 131) policy matures, the entire amount received is taxable or the additional amount received will be taxable?

Ans: Broadly there are two types of Life Insurance Policy (1) ULIP (2) others
[ULIP insurance plan offers the dual benefit of investment to fulfil your long-term goals, and a life cover) and other policies]

1. Policy taken before 1st February 2021

The amount received on the maturity of your ULIP is free from tax as per section 10(10D) of the Income Tax Act, 1961, if the amount of premium paid is less than 10% of the sum assured you will receive [For the ULIPs that are purchased before April 2012, the rate is 20%].

2. Policy taken on or After 1st February 2021

After the amendments that were made with the 2021 budget, the returns from your ULIP will be taxed if the premium paid by you in a year exceeds Rs 2.5 lakhs. ULIP proceeds will now be charged as a Capital gain (whether long-term or short-term will be decided by the tenure)

Payouts from life insurance policies (excluding ULIPs) issued after April 1, 2023, will be taxable if the total annual premium exceeds Rs. 5 lakhs.

Vipul Bhavsar |86 Answers |Ask -Follow

Tax Expert - Answered on Mar 09, 2025

Asked by Anonymous - Mar 06, 2025Hindi

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Sir, My LIC jeevan mitra plan 88 endowment plan policy is maturing in jun 2025. I started in jun 2000 for 25 years. Total net amount is around 6 lakhs. I heard it is tax free under section 10(10d). Do i need to submit income tax return to claim uder this section ? Because i dont have any other income. I am retired.

Ans: If the maturity amount is reflected in your AIS, then it is advisable to file return even if you are retired and do not have any other income.
Vipul Bhavsar
Chartered Accountant

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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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