How to define Taxable & Non-taxable payments of LIC, GPF/PF and Gratuity ?

What effect on Income Tax by the following Items ?

1. LIC Money Back Policy Amount, received after 5 years.
2. Final PF withdrawal Amount.
3. Amount of Gratuity received after retirement of Employee
   

LIC Money Back & Other allied Policy Maturity Payments:

All the amount received from any Insurance Companies are mostly exempted from Income Tax. However, there are three types of payments of LIC Policy maturity is not free from Tax.

1. any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA; or
2. any sum received under a Key-man insurance policy; or
3. any sum received under an insurance policy issued on or after the 1st day of April, 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured
   

Final G.P.F./ P.F. withdrawals:

Provident fund withdrawals is totally exempt from tax.

Retirement/Death Claim Gratuity Amount:

The retirement or death claim Gratuity amount could not clear that whether it is Taxable or Non-Taxable.

More information about tax scheme of gratuity as below :

• Govt. /Local Authority Employees Fully Exempt.
• Employees Covered Under Gratuity Act Least of following
• Actual Gratuity received.
• Rs 3,50,000;
• 15 days salary for each completed year or part thereof exceeding six months
• Any other Employees
• Actual Gratuity received.
• Rs 3,50,000;
• Half months average salary of each completed year or part thereof For point( 2 ) above , salary means (Basic+D.A) of last drawn salary and months consists of 26 days. For point (3) , Average Salary means (basic+D.A+Commission if fixed % of turnover) of last 10 months . Please also for point 3 , only completed year of service is to be counted.
  

Posted in: HRA Exemptions,Income Tax Exemptions,Taxable and Non-Taxable Payments