I received Rs 1.3 lakh from LIC policy after 1% TDS cut. Will I have to pay tax?
Check the policy issue date and the premium you have paid towards your policy as any amount received on maturity of a life insurance policy is fully taxable.
Shubham Agrawal Senior Taxation Advisor, TaxFile.in replies: Please check the policy issue date and the premium you have paid. When the premium paid on a policy exceeds 10% of the sum assured for policies issued after 1 April 2012, and 20% of the sum assured for policies issued before 1 April 2012, any amount received on maturity of a life insurance policy is fully taxable. You will have to disclose the amount received under the head 'income from other sources' and pay tax according to your income tax slab.
In 2016, I bought an insurance policy that covered my home and also provided life cover of about Rs 30 lakh. It was a one-time premium policy and the premium was about Rs 1 lakh. I did not claim this premium for tax deduction. Can I claim it now?
Rakesh Bhargava Director, Taxmann replies: Section 80C of the Income-Tax Act allows tax deduction on the premium paid for a life insurance policy. But this deduction is allowed for the financial year in which the premium is paid. In order to claim the deduction for financial year 2018-19, the premium needs to have been be paid between 1 April 2018 and 31 March 2019. As you paid the premium in 2016, you cannot claim the deduction for it in 2018-19.
I redeemed my investment in an ELSS fund after the mandatory 3-year lock-in period. Will the amount received be taxable?
Amit Maheshwari, Partner, Ashok Maheshwary and Associates replies: The long-term capital gains will be taxed at 10%. For investments made before 1 February 2018, the cost of acquisition will be the higher of the actual cost at the time of making the investment or its market value as on 31 January 2018. However, if the sale price is less than the market value, then the higher of cost and sale value will be considered for calculating the gain.