RPLI Plans were introduced in 1995 under the new postal life insurance schemes to cover the financial uncertainties of the rural Indian population.

Is LIC Maturity Amount Taxable or Not

Know Life Insurance Policy (LIC) Maturity Amount Taxable under Which Head?

What is the Maturity Amount?

Maturity amount is the sum of money received by a life insurance policyholder at the end of a policy term in case he/she survives the plan. Let us find out if the LIC maturity amount is taxable or not, in this post.

What do you mean by LIC Maturity Amount?

Life Insurance Corporation (LIC) of India pays a policyholder a sum of money as maturity benefit at the end of the policy term if the insured outlives the policy tenure. This amount is generally equal to the sum assured of the insurance policy at the time of maturity together with bonuses.

What is the LIC Maturity Benefit?

Let’s understand LIC maturity taxability by means of an example. Suppose you bought a life insurance policy of INR 10 lakh as sum assured for 10 years tenure. Now, when your tenure ends and if you outlive the policy period, LIC is likely to pay you the complete sum assured. This amount is called the maturity benefit.

LIC Maturity Amount is Taxable or Not – What Tax Implications are levied on LIC Maturity Benefit?

The total sum assured received as maturity benefit for surviving a life insurance policy of LIC is tax-free including the bonus as per section 10(10D) of IT. However, there are some eligibility criteria or conditions that need to be fulfilled to enjoy the tax-free maturity. Here, the sum assured of the life insurance policy and the premium amount is required to be in a particular ratio. Let’s take a look at the different conditions of taxability of life insurance maturity amount of LIC.

6 Conditions Under Which LIC Maturity Amount is Taxable

Below are the conditions under which the maturity amount of LIC insurance policies are taxable

2. If the nominee of the policy dies before the insured due to any already existing disability

1. In a keyman insurance policy, an employer gets the insurance of their employees done and also receives the claim benefit

3. The maturity sum from the LIC policy is taxable if the life insurance policy was purchased in the name of a person who was disabled.

4. If the policy is in the name of a person suffering from a particular disease that is mentioned under section 80DDB, the maturity amount received from the policy is taxable

5.Your maturity amount is taxable if you spend 20% more in annual insurance premiums than the Sum Assured for a policy purchased on or after April 1, 2003.

6. Your maturity benefit is taxable if you spend 10% or more in premiums in a year compared to the Sum Assured for an insurance purchased on or after 1 April 2012

3 Conditions Under Which the LIC Maturity Benefit Is Not Taxable

Apart from the conditions mentioned above, the maturity amount in the rest of the conditions come under the category of entirely tax-free.

2. Likewise, if the premium paid is within 15% of the sum assured for a life insurance policy bought for a disabled individual on or after April 1, 2003, the maturity benefit is tax-free

1. If you pay a premium which is within 10% of the sum assured under a life insurance policy bought on or after April 1, 2012, you can enjoy full exemption of tax from the maturity amount.

3. Also, if the premium paid is within 20% of the sum assured for policies purchased on or after April 1, 2003, the maturity amount is tax-free

Top LIC Plans 2023

LIC Policy

LIC Tech Term Plan

Term of Policy

LIC Jeevan Amar

LIC Jeevan Umang

LIC New Jeevan Anand

Sum Assured

10 to 40 years

10 to 40 years

100 years minus the entry age

15 to 35 years

INR 50 lakh  no limit

INR 25 lakh  no limit

INR 2 lakh  no limit

INR 1 lakh no limit

Need Detailed Information?

Let’s Connect