Personal Finance

Your Taxes

Sudhakar Sethuraman | Updated on November 01, 2020 Published on November 01, 2020

I am a housewife with income of ₹3.5 lakh from FD interest and long-term capital gains of ₹70,000 from debt mutual fund. Please help me calculate tax liability for the above income.

P Sujata

As per Section 112 of the Income Tax Act, income arising from the transfer of a long-term capital asset shall be chargeable to tax at the rate of 20 per cent (with indexation).

As per Section 87A, if the total income of a resident individual does not exceed ₹5 lakh, a rebate shall be allowed from the total taxes payable of an amount equal to the total tax payable, or ₹12,500, whichever is less. We assumed that you are a senior citizen (age between 60 to 79 years). The following table depicts the tax rate and total tax liability for FY 2019-20:

I purchased UTI ULIP (1971) in 2012 (for 10 years). Now I want to surrender the plan. What would be the income tax liability?

Dilip Kumar Bagaria

ULIPs are products that provide you a combination of a life insurance policy and an investment opportunity though a mutual fund (both debt and equity) in a single plan.

Any sum received under an insurance policy (policy issued on or after April 1, 2012) in respect of which the premium payable for any of the years during the term of the policy does not exceed 10 per cent of the actual capital sum assured could be claimed exempt u/s 10(10D) the I-T Act.

Thus, if the premium paid on the ULIP policy is less than 10 per cent of the sum assured, the amount received on maturity/surrender of ULIP could be exempt u/s 10(10D) of the I-T Act.

The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in

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Published on November 01, 2020
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