TMI BlogRationalisation of exempt income under life insurance policiesX X X X Extracts X X X X X X X X Extracts X X X X ..... elfare objective by subsidising the risk premium for an individual s life and providing benefit to small and genuine cases of life insurance coverage. However, over the years it has been observed that several high net worth individuals are misusing the exemption provided under clause (10D) of section 10 of the Act by investing in policies having large premium contributions (as it is acting as an investment policy) and claiming exemption on the sum received under such life insurance policies. 3. In order to prevent the misuse of exemption under the said clause, Finance Act, 2021, amended clause (10D) of section 10 of the Act to, inter-alia, provide that the sum received under a ULIP (barring the sum received on death of a person), issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be any change in taxation for polices issued before this date. Hence, it is proposed to amend the Act so as to- (i) insert a new proviso (sixth proviso) to clause (10D) of the section 10 of the Act to provide that nothing contained in this clause shall apply with respect to any life insurance policy (other than a unit linked insurance policy) issued on or after the 1st April, 2023, if the amount of premium payable for any of the previous year during the term of such policy exceeds five lakh rupees; (ii) insert a new proviso (seventh proviso) to clause (10D) of section 10 of the Act to provide that if the premium is payable by a person for more than one life insurance policy (other than unit linked insurance policy), issued on or afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clause, unit linked insurance policy shall have the same meaning as assigned to it in Explanation 3 to clause (10D) of section 10 of the Act; (vi) insert sub-clause (xviid) in clause (24) of section 2 of the Act to provide that income shall include any sum referred to in clause (xiii) of sub-section (2) of section 56 of the Act. 6. These amendments will take effect from 1st April, 2024 and will accordingly apply to the assessment year 2024-25 and subsequent assessment years. [clauses 3, 5 32] Full Text : Union Budget 2023-24 + FINANCE Bill, 2023 - FAQ - Frequently Asked Questions, TMI Short Notes , Experts comment, opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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