Need help on calculation of tax on Annuity if applicable-
D.O.B - Dec 1963
Date of proposal - Dec 2003
Date of last premium - Dec 2022 Date of vesting of Annuity - Dec 2023 Date of first annuity installment - Jan 2024 Premium amount - 10,000 per year
NCO + Bonus + 3 percent rebate amount = 4,23,809 25 percent commutation payed on Dec 2023 = 102866 Balance 3,17,857 - Annuity amount 19,866 payed yearly staring Jan 2024
What is the taxation on Annuity?
How to calculate Exclusion Ratio and Exclusion Period?
In your case, 25% of the amount received will be tax-free. Additionally, the monthly annuity starting from Jan 2024 will be taxable under Income from Other Sources as per the slab rates.
I have a similar question. I have couple of life insurance annuity policies and am already receiving monthly/annual annuity income on these policies. So far I have treated this as taxable under income from Other Sources. However, more recently I have come across some articles on exclusion ratio that claim that certain portion of the annuity payout is return of principal amount and is non-taxable. If this is applicable under Indian tax laws, I would like to get help in calculating this ratio for my policies and saving some tax on my annuity income.
Thanks