Mr. Rohan took a life insurance policy on 10th May 2014 with a sum assured of 18,00,000 and an annual premium of 1,50,000. The policy matured on 9th…

CA Intermediate · Taxation · MTP · September 2025
Mr. Rohan took a life insurance policy on 10th May 2014 with a sum assured of 18,00,000 and an annual premium of 1,50,000. The policy matured on 9th May 2024 and - 22,00,000 is due to receive by him. What will be the tax treatment of the maturity proceeds for the P.Y. 2024–25?
(A) Entire maturity proceeds of 22,00,000 is exempt
(B) ₹ 18,00,000 (sum assured) is exempt; ₹ 4,00,000 is taxable
(C) Entire maturity proceeds of 22,00,000 is taxable
(D) ₹ 18,00,000 (sum assured) is taxable; ₹ 4,00,000 is exempt

Suggested Answer and Working Notes:

Correct Answer: Option (A)

Entire maturity proceeds of 22,00,000 is exempt

Topics: Paper 3A: Income Tax Laws

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