Amendment of section 194DA.
44. In section 194DA of the Income-tax Act, for the words “one per cent.”, the words “five per cent. on the amount of income comprised therein” shall be substituted with effect from the 1st day of September, 2019.
Notes on Clauses:
Clause 44 of the Bill seeks to amend section 194DA of the Income-tax Act relating to payment in respect of life insurance policy.
The said section provides for levy of tax deduction at source at the rate of one per cent. on the sum payable by way of a life insurance policy, including the sum allocated by way of bonus on such life insurance policy, excluding the amount exempted under clause (10D) of section 10.
It is proposed to amend the said section so as to provide that the levy of tax deduction at source shall be on the income comprised in the sum payable by way of redemption of a life insurance policy, including the sum allocated by way of bonus on such life insurance policy, excluding the amount exempted under the said clause (10D) of section 10 at the increased rate of five per cent.
This amendment will take effect from 1st September, 2019.
