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Home / Insurance & Tax

Special Provisions

• Under Section 10(10A) (iii) of the Income Tax Act, any payment received by way of commutations of pension out of the Jeevan Suraksha annuity plans is exempt from tax
  
  
• Under Section 10(10D), any sum received under a Life Insurance policy (not being a Key Man policy) is also exempt from taxation. But it is wise to remember that Pensions received from Annuity plans are not exempted from Income Tax.
  
  
• Under Section 10(13), the payments received from an approved Superannuation Fund made

- on the death of a beneficiary

- to an employee in lieu of or in commutations of an annuity on his retirement or after a specified age.

-  by way of refund of contributions on the death of a beneficiary, etc.

are exempt from income tax.

• Section 80 CCC provides a deduction of up to Rs.10,000/-  to an individual assessee for any amount paid or deposited to effect or keeping in force any annuity plan of LIC for receiving pension from the fund referred in sections 10 (23AAB).  Presently LIC's Jeevan Suraksha plan is one such plan using such benefit.

But you must always keep a few factors in mind when considering Section 80 (CCC)

• Where the assessee or his nominee surrenders the Annuity before its maturity, then the surrender value shall be taxable in the hands of the assessee or his nominee in the year of receipt.
  
  
• The amount of pension received will be taxable in the hands of the assessee or nominee.

Additionally, you can also claim rebate under Section 88 of the Income Tax Act for the premiums paid.

Click here to have a look at the provisions of Section 88.

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