As per section 10(10D), any amount received under a life insurance policy, including bonus is exempt from tax. However, following receipts would be subject to Tax:
- Any sum received u/s 80DD(3)i.e., received by an individual or HUF on whom the person with disability was dependent ; or
- Any sum received under Key-man insurance policy; or
- Any sum received in respect of policies issued on or after April 1st, 2003, in respect of which the amount of premium paid on such policy in any financial year exceeds 20% (10% in respect of policy taken on or after 1st April, 2012) of the actual capital sum assured; or
- Any sum received for insurance on life of specified person (issued on or after April 1st 2013) in respect of which the amount of premium exceeds 15% of the actual capital sum assured.
- Exemption is available only in respect of amount received from life insurance policy.
- Exemption u/s 10(10D) is unconditionally available in respect of sum received for a policy which is issued on or before March 31, 2003.
- Amount received on the death of the person will continue to be exempt without any condition.