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Therefore, the enhanced survival benefit withdrawn under Option 2 will be added to your mother-in-law's taxable income for the year.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