Are receipts from life insurance policies on maturity along with bonus taxable as per IT Act ? || Taxability of life insurance maturity amount

Taxability of life insurance maturity amount

As per section 10(10D) of income tax act, any amount received under a life insurance policy, including bonus is exempt from tax. However, following receipts would be subject to tax:

1. Any sum received under sub-section (3) of section 80DD of income tax act; or
2. Any sum received under Key man insurance policy; or
3. Any sum received in respect of policies issued on or after 01.04.2013, in respect of which the amount of premium paid on such policy in any financial year exceeds 20% (10% in respect of policy taken on or after 01.04.2012) of the actual capital sum assured; or
4. Any sum received for insurance on life of specified person (issued on or after 01.04.2013) in respect of which the amount of premium exceeds 15% of the actual capital sum assured (taxability of life insurance maturity amount).

* Any person who is – (Taxability of life insurance maturity amount)

1. A person with disability or severe disability specified under section 80U of income tax act; or
2. suffering from disease or ailment  as specified in the rule made under section 80DDB of income tax act.
3. Following points should be noted in this regard:
   1. Exemption is available only in respect of amount received from life insurance policy (taxability of life insurance maturity amount).
   1. Exemption under section 10(10D of income tax act is unconditionally available in respect of sum received for a policy which is issued on or before 31.03.2013.
   1. Amount received on the death of the person will continue to be exempt without any Term and condition.

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