Income Tax On Annuity From Lic

Income tax deduction.

Income tax on annuity from lic. Section 80ccc of the income tax act 1961 allows deduction on the premium paid to buy an annuity policy which pays annuity pay outs throughout your lifetime. I am 65 and retired. Any periodic payment received as pension on an annuity purchased by you directly becomes taxable under the head income from other sources. Pension received from annuity or amount received upon surrender of annuity including interest and bonus is taxable in the year of receipt according to the lic website.

My only sources of income are bank fds post office savings senior citizen savings scheme lic pension as annuity superannuation scheme of employer manage by p gs dept of lic and savings interest from my bank. 28 march 2009 section 80ccc provides that the pension received from such annuity plan under superannuation scheme of lic or any other insurer will be taxable. First to the extent the annuity is deferred taxation on the growth in the annuity s value is income tax deferred until distributions are made from the. There are two basic income tax rules.

There is no express deduction available against such income and the deposit for such scheme was already availed of. Section 10 10d exempts any sum received from a life insurance policy subject to certain conditions. Pension income is added to individual income and income tax need to be paid based on income tax slab applicable to that person. Pension plans do not offer guaranteed returns as the pension income would be provided based on the annuity price age of the person option chosen.

However annuity received from superannuation fund of lic is taxable under head salary. Goods and services tax or gst has come into effect from july 1st 2017 earlier it was applicable on lic policy in the form of service tax gst is a biggest tax reform in india history it impact every one and all industries then how lic can keep themselves apart from it gst is also chargeable on the interest on delay. Mint income tax rules for annuity received from lic. My gross annual income for fy 2018 19 is slightly below rs 6 65 lakh.

18 jeevan akshay vii 857 interest rate returns. The said amount shall be taxable under the head income from other sources being the residual head under the i t act. Thus if you buy the pension plans offered by lic the premium paid would be allowed as a deduction under this section.