Section 10(10D) - Exemption on Life Insurance Maturity Proceeds
Maturity proceeds (including bonus) from life insurance policies are exempt from income tax, subject to conditions on premium paid relative to sum assured. Policies issued after April 1, 2023 with annual premium above ₹5 lakh lose exemption.
Key provisions
- Policy issued before April 1, 2012: premium ≤ 20% of sum assured → full exemption
- Policy issued April 1, 2012 onwards: premium ≤ 10% of sum assured → full exemption
- Policy issued after April 1, 2023 (ULIP/non-ULIP): aggregate annual premium ≤ ₹5 lakh → exempt (excess taxed as capital gains)
- Death claims: always fully exempt regardless of premium-to-sum-assured ratio
- Keyman insurance policies are NOT exempt under 10(10D)
- ULIPs: gains from ULIPs with premium above ₹2.5 lakh annually taxed as capital gains (post-Finance Act 2021 rules)
FAQs
If the LIC policy was issued after April 1, 2012 and the annual premium was more than 10% of the sum assured, the maturity amount is fully taxable. If premium ≤ 10% of sum assured, it is fully exempt under Section 10(10D). Always check the premium-to-sum-assured ratio for your policy.
Use via API
GET/v1/tax-law/sections/by-2025-ref/25(10D)
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REQUEST · cURL
curl https://api.thynktax.com/v1/tax-law/sections/by-2025-ref/25(10D)
RESPONSE · 200 OK
{
"act_2025_ref": "25(10D)",
"old_reference": "Section 10(10D), Income Tax Act 1961",
"title": "Section 10(10D) - Exemption on Life Insurance Maturity Proceeds",
"category": "Exemption",
"limit_or_rate": "Exempt (conditions apply); policies post April 1, 2023 capped at ₹5L premium",
"applicable_to": "Individual",
"effective_from": "2026-04-01"
}