Are receipts from life insurance policies on maturity along with bonus taxable?






Rohit Rohit
Answered on January 03,2020

As per section 10(10D), any amount received under a life insurance policy, including bonus is exempt from tax. However, the following receipts would be subject to tax:

    Any sum received under sub-section (3) of section 80DD; or
    Any sum received under Keyman insurance policy; or
    Any sum received in respect of policies issued on or after April 1st, 2003, in respect of which the amount of premium paid on such policy in any financial year exceeds 20% (10% in respect of policy taken on or after 1st April 2012) of the actual capital sum assured; or
    Any sum received for insurance on the life of *specified person (issued on or after April 1st, 2013) in respect of which the amount of premium exceeds 15% of the actual capital sum assured.

    * Any person who is –

    i)  A person with a disability or severe disability specified under section 80U?; or

    ii) suffering from disease or ailment as specified in the rule made under section 80DDB.

    Following points should be noted in this regard:

      An exemption is available only in respect of the amount received from the life insurance policy.
      Exemption under section 10(10D) is unconditionally available in respect of sum received for a policy that is issued on or before March 31, 2003.
    The amount received on the death of the person will continue to be exempt without any condition.


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