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Section 194DA: Maturity of Life Insurance Policy

Life insurance is popular in India due to its financial protection. However, maturity of insurance policy could be taxed under section 194DA, unless exempt under section 10(10D). 

Who should deduct TDS under section 194DA? 

Any person paying an insurance policy amount to a resident should deduct tax before releasing the payment. 

What is the rate and timing of tax deduction under section 194DA? 

The tax rate under section 194DA is 5% at the time of payment. (20% if no PAN is provided by the deductee) 

When is TDS not required? 

There is no need for a TDS under section 194DA in these situations: 

  • If the payment amount (or total amount in the fiscal year) is less than Rs.1,00,000.
  • If the received insurance amount matches certain cases:

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