Insurance Maturity Received and 1% TDS u/s 194DA deducted. So what will be the
tax liability under Income Tax Act 1961? Information is as follows:
amount received in maturity Rs. 4,25,000/-
premium paid is Rs. 3,00,000/-
assessee is required to pay tax on Gross
receipt Rs. 425000 or Net receipt Rs. 125000 (425000-300000 premium paid)
As circular issued by
CBDT No.7/2003 Dated 05-09-2003, the extract of which says the income accruing
on such policies (not including the premium paid by the assessee) shall become
taxable. Here Such policies mean
policies not exempt from tax.
Therefore, as per the
above circular, Rs.1,25,000/- (4,25,000-3,00,000) will be chargeable to tax
under the head income from other sources.