Income tax rule: Proceeds from life insurance coverage coverage to be taxable from April 1?

New revenue tax rule 2023: After ushering in new monetary yr from 1st April 2023, an excellent variety of revenue tax guidelines are going to alter. These revenue tax guidelines have been modified on the premise of Union Budget 2023 proposals which were handed by the parliament in just lately by means of Finance Bill 20223. As per this Finance Bill, proceeds from the revenue tax insurance policies over the annual premium of ₹5 lakh will now turn out to be taxable from 1st April 2023 i.e. from tomorrow. So, it isn’t that every one life insurance coverage coverage proceeds shall be taxable. Only these life insurance coverage proceeds which have an annual premium of over ₹5 lakh shall be taxable from subsequent monetary yr.

Union Finance Minister Nirmala Sitharaman had proposed to levy tax on proceeds of life insurance coverage coverage with annual premium of over ₹5 lakh whereas presenting the Union Budget 2023 citing, “It is proposed to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above ₹5 lakh, income from only those policies with aggregate premium up to ₹5 lakh shall be exempt. This will not affect the tax exemption provided to the amount received on the death of person insured. It will also not affect insurance policies issued till 31st March, 2023.”

In the Union Budget 2022, Finance Minister Nirmala Sitharaman had imposed revenue tax on proceeds from ULIP (Unit Linked Insurance Plan) on annual premium over ₹2.5 lakh. So, from 1st April 2023, proceeds from ULIP on annual premium as much as ₹2.50 lakh and proceeds from life insurance coverage on annual premium as much as ₹5 lakh shall be revenue tax exempted.

Some different revenue tax rule modifications from 1st April

– From tomorrow, new revenue tax slab will turn out to be by-default tax regime for incomes people. Now, if an incomes particular person want to go together with the previous tax regime, must go for the previous tax regime.

– Standard deduction of ₹50,000 has been handed on to each previous and new revenue tax regime.

– Tax free revenue for salaried people has now gone as much as ₹7 lakh each year from 1st April 2023.

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