Insertion of new section 194DA
55. After section 194D of the Income-tax Act, the following section shall be inserted with effect from the 1st day of October, 2014, namely:––
Payment in respect of life insurance policy.
“194DA. Any person responsible for paying to a resident any sum under a life insurance policy, including the sum allocated by way of bonus on such policy, other than the amount not includible in the total income under clause (10D) of section 10, shall, at the time of payment thereof, deduct income-tax thereon at the rate of two per cent.:
Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than one hundred thousand rupees.”.
Notes on Clauses:
Clause 55 of the Bill seeks to insert a new section 194DA in the Income-tax Act relating to payment in respect of life insurance policy.
It is proposed to insert a new section 194DA so as to provide that any person responsible for paying to a resident any sum under a life insurance policy, including the sum allocated by way of bonus on such policy, other than the amount not includible in the total income under clause (10D) of section 10, shall, at the time of payment thereof, deduct income-tax thereon at the rate of two per cent.
It is further proposed to provide that no deduction shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than one hundred thousand rupees.
This amendment will take effect from 1st October, 2014.
