The Income Tax Department has made a new rule under the calculation of income from life insurance. Under this, tax will be levied on the premium of more than five lakh rupees after calculating the income.
The Income Tax Department has made a new rule under the calculation of income from life insurance. This rule is for those who pay more than Rs 5 lakh as Life Insurance Premium. The Central Board of Direct Taxes (CBDT) has notified the Income Tax Amendment Rules 2023.
Under this notification, Rule 11UACA has been prescribed for the calculation of income in respect of the amount received on maturity of life insurance policies, in which the premium amount is more than Rs 5 lakh. Such policy must have been issued on or after April 1.
What will be the change in the rule
According to changes from the Income Tax Department, tax exemption on maturity benefit under section 10(10D) for policies issued on or after April 1, 2023 will be allowed only if the total premium paid by an individual 5 lakh per annum up to Rs.
Income will be taxed
Apart from this, the income on payment of premium of more than five lakhs will be computed from income and tax will be levied at applicable rates. Changes in the tax provision in relation to life insurance policies except ULIPs were announced in the Union Budget 2023-24.
No tax on maturity amount on death
It has been said on behalf of experts that tax will be levied after calculating the income from the amount paid on premium of more than five lakh rupees. This tax will be calculated on maturity and then the entire amount will be paid. At the same time, the Income Tax Department has said that tax will not be imposed on the amount of premium received on the death of a person.
