Sir, I purchases ICICI Prudential Wealth Builder Fund on Nov 2012 with a premiums of Rs. 30,000/- per annum for 5 years only (Policy term - 10 years) and it matured on Nov 2022 and I got matured amount of 2.97 Lakhs. Is the matured amount is taxable and if, what amount of tax to be paid by me. Please advice
Ans: Income Tax Act exempts amount received under a life insurance policy from tax subject to certain conditions. Such amount also includes the sum allocated in the form of bonus on such policy. Further, exemption is available if premium paid, does not exceeds 10% of the actual capital sum assured, for any of the years (during the term of the policy).
In your case ICICI Prudential wealth builder fund includes life insurance and if premium paid is not more than 10% of sum assured, amount received on maturity will not be taxable.