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I retired from LIC on April 30, 2019. All my tax dues (salary) were recovered from my final payments in May 2019.
I had opened an NSS 87 account with the Postal Department in April 1991, deposited ₹18,000 in it in March 1992, and claimed tax benefit during AY1992-93 (under Section 88 during that period). I had been withdrawing an interest portion of ₹2,490 almost every year since 1995. On May 10, 2019, I went to the post office to withdraw the accrued amount in my NSS 87, which was ₹40,757. A sum of ₹4,075.70 was deducted (TDS) when I closed the account. I want to know whether the income tax liability for the above amount (₹40,757) is over as I am now in the 30 per cent tax slab? Or is there any provision to get refund of the tax paid as the account is an old one and the amount was deposited long back?
I have been an LIC insurance agent since December 2019 and have earned an agency commission of ₹28,110 between December 2019 and March 2020. An amount of ₹1,481 was recovered from (TDS @ 15 per cent) my commission. Will I be liable to pay the remaining 25 per cent tax for the LIC commission for the year since I am in the 30 per cent tax slab?
KP Pandit
Withdrawal of any amount standing to the credit of the NSS scheme, together with interest, is taxable under sub-section (2) of Section 80CCA of the Income Tax Act. Further, tax at 10 per cent shall be deducted at source as per Section 194EE, if such amount exceeds ₹2,500. From the facts, we understand that a sum of ₹40,757 was withdrawn during FY2019-2020 and taxes deducted at 10 per cent.
Since you are in the 30 per cent tax bracket, you are liable to pay the remaining tax (after claiming credit of TDS deducted) before filing your income tax return.
Commission income earned as an agent of LIC India is taxable at the applicable slab rates. You will have to include the agency commission income in your total income and compute the tax dues together with surcharge (if any) and cess.
Taxes of ₹1,481 deducted by LIC can be claimed as a deduction from your total tax liability.
The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in
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