Myself Mrityunjoy Choudhury. I have a TATA AIA life insurance policy ''Swarna Pratigya''. It was a single premium policy. So I had given a premium of 1,00,000 rupees with sum assured for 1,10,000 rupees for 10 years. So that the minimum lock in period of 5 years has already been passed, I am thinking of surrendering the policy. The present fund value is 76,000 rupees. So as my pan is updated I would be deducted 2% TDS as TATA aia told me, no any other tax. But my question is when the total surrendered amount would be added to my annual income, then do I have to pay income tax again? Many have given different answers. I am really puzzled. My policy's income tax benefits are- ''Premiums paid under this life insurance policy are exempted from tax under Section 80 C and maturity proceeds are exempted from tax under Section 10 (10D), subject to fulfillment of terms and conditions.'' I would be really grateful to you if you can provide me my information.
Hello Sir,
Yes, it will be taxed in your income since you are making a pre mature withdrawl and it is not your maturity benefit.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi,
Taxation of policy upon surrender varies from policy to policy. Your policy document should state whether the entire amount is taxable if it is surrendered. You may alternatively check with your insurance agent.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
