I receive LIC annuity monthly. Total annual amount will be around 1.5 lakhs . In ITR where it should be shown. Can I get tax free
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. ?P?olicy 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. ??P?olicy 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.