 "Life insurance")
A new circular issued by the Income-Tax (I-T) Department provides greater clarity on the taxability of non-unit-linked (basically, traditional) life insurance policies. Prior to Budget 2023, a payout from any life insurance policy (other than Ulips) was exempt from taxation, provided a few specifications were met.
Says Pallav Pradyumn Narang, partner, CNK: “According to Section 10(10D), amended in the Finance Act of 2023, there is no tax exemption for life insurance policies issued on or after April 1, 2023, if the premium exceeds Rs 5 lakh.” An additional condition, which has been there for a long time, is that there is no exemption if the premium exceeds 10 per cent of sum insured.
Plugging tax leakage
