Rules fixed for amount received from life insurance with premium of more than five lakh rupees
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Rule 11UACA has been prescribed for computing income in respect of amount received on maturity of life insurance policy. This provision is for insurance policies in which the premium amount exceeds five lakh rupees and such policies have been issued on or after April 1, 2023.
New Delhi. The Income Tax Department has laid down rules for computing income from life insurance policy in case the annual premium is more than five lakh rupees. The Central Board of Direct Taxes (CBDT) has notified the Income Tax Act (Sixteenth Amendment), 2023. In this, Rule 11UACA has been prescribed for computing income in respect of amount received on maturity of life insurance policy. This provision is for insurance policies in which the premium amount exceeds five lakh rupees and such policies have been issued on or after April 1, 2023.
As per the amendment, for policies issued on or after April 1, 2023, tax exemption on maturity benefit under section 10(10D) will be applicable only if the total premiums paid by an individual does not exceed five lakhs per annum be up to Rs. The amount received for premiums in excess of this limit will be added to income and taxed at the applicable rate. Changes in the tax provision in respect of life insurance policies, except ULIPs (Unit Linked Insurance Plans), were announced in the budget for the financial year 2023-24.
As per the formula, any surplus amount received on maturity will be taxed under the category of ‘income from other sources’, said Om Rajpurohit, joint partner (corporate and international tax), AMRG & Associates. The taxation provision for amount received on the death of the life assured has not been changed and will be exempt from income tax as before.
Disclaimer: IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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