Taxability on Foreclosure of Life Insurance Policy

Income Tax Income from Capital Gains
1

I am 70 year old as on date. Resident Individual.
Only source of Income is Pension of Rs 10000 monthly.

I had take a Life Insurance Policy of Rs 21,00,000 on 21-06-2019.
Annual Installment Premium Rs 2,10,000.

I paid Installment for TWO policy terms, till 21-06-2021 totaling a premium of Rs 4,20,000 in TWO years.
Then I stopped paying premium completely.
But I did not Surrender the Policy.
The Policy was just in an Inactive state for 3 years.

The company has a Lock-In-Period of 5 Years.

On 21-06-2024 the Lock-In-Period ended. The company foreclosed the policy and sent me a statement that I will receive Rs 6,03,038.3.

Will Sec 10(10D) and Sec 194DA (TDS) be applicable on this amount?

Please Guide.
Thank You.

2

Can You Please Guide.

Thank You

@Shrutika_Shah
@Sakshi_Shah1
@Laxmi_Navlani
@Muskan_Balar
@CA_Niyati_Mistry
@Zainab_Hawa

3

Hey @ARGHYA_DANDA,

In your case, as the annual premium paid does not exceed 10% of the sum assured, the maturity amount will be exempted u/s 10 (10D).

4

@Surbhi_Pal

Thank You for your response.
Relieved on conformation.