Premature LICI Tax Liability FY 24-25

Income Tax
, ,
1

Hi,
In the FY 24-25 I have some income (
STCG 1,80,000
LTCG 90,000
INTRADAY 68,000
DIVIDEND 41,000
OTHER BUSINESS INCOME 10,000
)

= SO TOTAL INCOME 3,89,000

Please note that I have two ( 2 ) LICI policies, which I intend to terminate prematurely to receive the early payout amounts.

My query is as follows: After reviewing my FY 24-25 P&L financials,

Could you please advise whether receiving early payout amounts totalling Rs. 2 lakhs from my two ( 2 ) LICI policies will result in a tax liability ?

Please note that I wish to close my LICI policies before maturity. :smiley: :smiley:

Thanks

2

Hello @gourab

As per Section 10(10D) of the Income Tax Act, if you have taken a life insurance policy after April 1, 2012, and the premium exceeds 10% of the sum assured, the surrender amount becomes taxable.

If the surrender amount of ₹2 lakh is taxable, your total income will exceed the basic exemption limit. In this case, STCG will be taxed at 20%.

Hope this helps!