Question: Receipts from Insurance proceeds are exempt or taxable?
Answer: Insurance proceeds are taxable in following cases:
1. In case the life insurance policies (excluding ULIPs) issued on or after April 1, 2023, the payouts from policy will be taxable if the total annual premium exceeds Rs. 5 lakhs. (for policies issued on or after 01.04.2023)
2. In case the life insurance policy is issued on or after 1 April 2012 and the premium payable exceeds 10% of the actual sum assured, the maturity proceeds are taxable. (For policies issued on or after 01.04.2012)
3. In case the life insurance policy is issued between 1 April 2003 to 31 March 2012 and the premium payable exceeds 20% of the actual sum assured, the maturity proceeds are taxable. (For policies issued between 01.04.2003 to 31.03.2012)
Please note that payment made to nominee after death of policy holder is exempt in all cases.
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