By Chirag Nangia
I had purchased a single premium unit linked strategy titled Samridhi Plus of LIC on March 14, 2011 and it matured on March 14, 2021. The single premium paid was Rs 30,000 against the sum assured quantity of Rs 40,000. I was paid a maturity quantity of Rs 60,109. Is the maturity quantity totally taxable?
—Arup Majumdar
As per the Income Tax Act, any sum received beneath a life insurance coverage policy is exempt from tax if premium payable for any of the years for the duration of the term of the policy is significantly less than 10% of the capital sum assured. Here, the premium exceeds 10% of capital sum assured and so, the maturity proceeds is taxable in the year of receipt (i.e. FY 2021-22). Notably, TDS has not been deducted as the maturity proceeds are significantly less than Rs 1 lakh.
I sold unlisted equity shares and received LTCG of Rs 5 lakh in FY21. In FY20, I claimed exemption u/s 54F against sale of a lengthy term capital asset. Am I eligible to claim exemption of the LTCG u/s 54 EC in FY21?
—N A Viswanathan
Section 54EE remains inoperative as the ‘long term specified assets’ have not been notified, resultantly exemption beneath the section can not be claimed. Further, Section 54F imposes a restriction on acquire of a further residential residence (other than the one for which exemption is claimed) inside one year from the transfer of the original asset.
Can an assessee seek relief beneath Section 54F taking the view that he has only ‘one residential house property’ and the joint one belongs to wife?
—G Krishna Warriar
One of the circumstances to claim the advantage of exemption beneath Section 54F is that on the date of transfer of the asset, the taxpayer ought to not personal more than one other residential residence (other than the new home). Despite favourable rulings of the Tribunal, the claim for deduction beneath section 54F has been rejected by High Courts, exactly where the assessee, on date of sale of lengthy term capital asset, owns a residential residence, even jointly with a further particular person. It has been explicated that the proper and ownership of such assessee, in the residence, to what ever extent is exclusive. Therefore, conservatively, it is advised to not claim the deduction.
The writer is director, Nangia Andersen India. Send your queries to