Mr. Rohit, a resident, has received 9 lakhs on 30.6.2024, towards maturity proceeds of LIC policy taken on 1.7.2021, for which the sum assured is 8…
CA Final · Direct Tax Laws and International Taxation · PYQS · January 2026
Mr. Rohit, a resident, has received 9 lakhs on 30.6.2024, towards maturity proceeds of LIC policy taken on 1.7.2021, for which the sum assured is 8 lakhs and the annual premium was - 2,50,000.
Suggested Answer and Working Notes:
(iii) Since the annual premium exceeds 10% of sum assured in respect of a policy taken after 31.3.2012, the maturity proceeds of 9lakhs received on 30.6.2024 are not exempt under section 10(10D) in the hands of Mr. Rohit. Therefore, tax is required to be deducted @5% under section 194DA on the amount of income comprised therein i.e., on 1,50,000 (9lakhs being maturity proceeds - 7,50,000, being the aggregate amount of insurance premium paid). Accordingly, tax deduction at source is 7,500.
Topics: Deduction, Collection and Recovery of Tax
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