Surrender of Policy

POSTED BY Avanti ON November 24, 2011 11:59 am COMMENTS (6)

Hi,

From last 3 years I showed my premium of LIC Jeevan Saral policy for income tax deduction. In current FY year (2011-12) also I want show policy premium for IT deduction.

My question is that if Surrender this Policy in Apr-2012 then premium paid by me in current FY is valid for tax deduction or not?

Regards,
Avanti

6 replies on this article “Surrender of Policy”

  1. Dear Sanjay, for ULIPs the lock-in period is 3Y where as for traditional policies it’s 5Y & here in the original query, the policy in question is Jeevan Saral, which falls in traditional category & that’s why I said for 5Y term.

    Thanks

    Ashal

  2. SANJAY KUMAR says:

    Dear Ashal

    The tenure is 5 yrs or 3 yrs??

    Regds

    Sanjay

  3. Avanti says:

    Thanks Again

  4. Dear Avanti, if you opt to surrender the policy after completing the 5 policy years, the surrender amount ‘ll become tax free & also the tax saved in prev. years ‘ll not be revert back.

    Thanks

    Ashal

  5. Avanti says:

    Mr. Ashal

    thanks for u r valuable information.

    Plz can u tell me If I surrender this Policy after 5 yrs. then tax benefit under this policy will be applicable?

    Regards,
    Avanti

  6. Dear Avanti, Please do note, in case you are surrendering the policy before completing the 5Y holding period, not only the surrender amount ‘ll become taxable but the income tax saved in prev. year ‘ll also become tax liability in the year of surrender.

    For your basic query, yes you may claim tax benefit on your policy for the current FY also. But do remember, the tax saved in current Fy as well as in prev. 3 Fy,. ‘ll become payable next FY when you ‘ll surrender your policy.

    Thanks

    Ashal

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