Taxation of surrender receipts of LIC Jeevan Saral Policy

Income Tax Income from Other Sources
1

I have a LIC Jeevan Saral policy commenced in April,2012 and want to surrender that policy now. Can you please help me finding if the surrender value is tax exempted or taxed?

Date of Commencement : 18th Apil,2012.
Annual Premium: Rs.48520
Sum Assured: 10 Lakhs
Term : 20 years
Surrender Value has Loyalty addition too.

It appears that it is exempted as per section 10 of income tax, is it correct or am i missing something?

2

Hey @rajrk60,

As the annual premium paid does not exceed 10% of the sum assured, the amount received on surrender of the life insurance policy is exempted from taxes.

Hope this helps!

3

Hi @Surbhi_Pal ,

Thanks for your response.
Is Loyalty addition of surrender value too exempted from tax?
As Surrender value is exempted from the tax, should we show it in ITR while filling?

4

Yes, any bonus amount that you receive is also exempted from taxes. Moreover, you should report it as well.

5

thanks Surbhi for checking.