As per Section 10 (10D)
Following amount received from insurance company is exempt from Income tax
Any amount received on death by legal heirs
Fully exempt without condition
Any amount received on other than death,
Exempt if insurance premium is upto certain percentage of sum insured as follows
|
Policy Issued from |
Premium as a % of Sum assured |
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from 1/04/2003 to 31/3/2012)
|
20% for all |
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After 31/3/2012 |
10% (15% in case of disabled persons as per section 80DDB or Section 80U) |
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When is TDS under Section 194DA not exempt.
- If insurance premium >10%/15%/20%
- Sum received under a Keyman insurance policy; or
- Any sum received under sub-section (3) ofsection 80DD or sub-section (3) of section 80DDA (i.e. any sum received by person maintaining)
In this case, TDS is now applicable u/s 194DA at
2%
1% (New Amendment from 1-6-2016)
if amount paid is 100000 or more (No TDS up to 99,999)
Note;- Insurance Company will deduct TDS @ 10% on such amount.
|
Policy taken on |
% of Sum Assured |
Permissible Limit |
Sum Received |
Whether TDS applicable |
|
1.4.2012 |
125000/400000=31.25% |
10% |
4.5 lacs |
Since amount received is not less than 1 lacs, And % of Sum Assured>10%. Income is not exempt TDS is applicable @ 2% |
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1.4.2010 |
35000/200000 =17.5% |
20% |
2.2 lacs |
Since % of Sum Assured is less than 20%.income is exempt TDS is not applicable |
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1.4.2010 |
19000/90000= 21.11% |
20% |
95000 |
% of capital assured >20% Income is taxable
However amount received is less than 100000 Hence no TDS |
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