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Section 194DA: Maturity of Life Insurance Policy

Table of Contents
 
  1. Who should deduct TDS under section 194DA? 
  2. What is the rate and timing of tax deduction under section 194DA? 
  3. When is TDS not required? 

Life insurance is popular in India due to its financial protection. However, maturity of insurance policy could be taxed under section 194DA, unless exempt under section 10(10D). 

Who should deduct TDS under section 194DA? 

Any person paying an insurance policy amount to a resident should deduct tax before releasing the payment. 

What is the rate and timing of tax deduction under section 194DA? 

The tax rate under section 194DA is 5% at the time of payment. (20% if no PAN is provided by the deductee) 

When is TDS not required? 

There is no need for a TDS under section 194DA in these situations: 

  • If the payment amount (or total amount in the fiscal year) is less than Rs.1,00,000.
  • If the received insurance amount matches certain cases:

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The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

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