Is it correct to show Life insurance surrender value as Exempted Income in ITR-2 ?

POSTED BY prabhudutta ON January 27, 2014 5:58 pm COMMENTS (4)

Dear All,Recently, I surrendered a life insurance policy of mine and got a payment of around Rs.54000/- through NEFT as surrender value. I had deposited a sum of Rs.60,000/- in four years as premium before surrendering. Therefore, I incurred a loss of around Rs.6000/- over what i had paid earlier as premium.

Do I need to show this surrender value (Rs.54,000/-) as Exempted Income in ITR-2 while filing my income tax return for AY 2014-15. (See there is no income at all in this case).

Or should I simply file  ITR-1 as I have only salaried income besides the above surrender amount.

Plz guide me which form to file ITR-1 or 2.

4 replies on this article “Is it correct to show Life insurance surrender value as Exempted Income in ITR-2 ?”

  1. ashalanshu says:
    January 29, 2014 at 6:52 am

    Dear Prabhu, for ULIPs, after 3Y in the policy, the SV is tax free. So for you it’s tax free and to be declare as exempted income in your ITR.

    For traditional policies, the SV value becomes tax free after 5 policy year.

    Thanks

    Ashal

    Reply
    1. prabhudutta says:
      January 29, 2014 at 11:20 am

      Dear Ashal,

      Thanks for ur reply.

      Prabhu

      Reply
  2. ashalanshu says:
    January 27, 2014 at 8:35 pm

    Dear Prabhu, the policy in question was a ULIP or traditional policy?

    Thanks

    Ashal

    Reply
    1. prabhudutta says:
      January 28, 2014 at 5:56 pm

      Dear Ashal,

      It was a ULIP policy. Will the treatment be different for ULIP and traditional policies ?

      Thanx

      Prabhu

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.