Budget 2019: TDS on life insurance policies increased

Budget 2019: TDS on life insurance policies increased

Budget 2019 has proposed to raise the tax at source (TDS) limit in the case of life insurance policies from 1 to 5 per cent of the amount to be paid by the insurance companies. Under Section 194DA of the Income Tax Act, 1961, any amount received by the life insurance policyholder from an insurer is subject to TDS of 1 per cent, if the maturity proceeds is not exempted under Section 10(10D). If in the life insurance policies the sum assured is less than 10 times the premium amount, the policy proceeds are not tax-free under Section 10(10D).

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