I invested Rs. 12,000 for 3 years in ICICI Life Time Super Pension at that time I was working and got income tax exemption for this amount. Now I want to surrender my policy, currently I am pursuing my Post Graduation and have no income. What would be tax implications if any?
Shashwat Jain via email
If you surrender your policy between 3-5 years (depending on the type I or II), then entire surrender value gets added to your income in the year of receipt (in this case, you can withdraw 99% of the fund value). If you terminate the contract of insurance , your 80C deductions claimed in the past years is taxed as Income from other sources.
File you Income Tax return with Surrender Income as "Income from other sources" in the year of surrender of policy.
Hi Shashwat,
You can surrender your pension policy after three years of its inception. However, you should note that the surrender value for such pension policies shall be taxable in your hand in the year in which it has surrendered as under :
If the premium paid earlier is claimed for deduction u/s 80CCC, then entire surrender value including bonus or interest if any received shall be taxable as Income from other sources and if no deduction claimed u/s 80CCC, then only the difference amount i.e. premium paid minus surrender value received will be taxable as income from other sources.”
Other than this you also have an option of availing cover continuance option. Please get in touch with the company on 1800-222-020 for more details or visit your nearest branch.
- ICICI Prudential Life