I am surrendering my Single Premium 1 lakh TATA AIA ULIP policy which I took in 2007 after 10 years since market is up. Actual maturity is some more years away. Will I have to pay any TDS on the capital gain and if so what percentage. I have PAN card and details are provided. Since I am NRI, is there any other document’s to be submitted other than PAN card.
Yes, TDS under Section 195 of the IT Act, 1961 on any sum paid under a life insurance policy to Non-Resident Indians ONLY if the policy is not exempt under Section 10(10D). Further, no tax will be deducted for countries where DTAA benefit is available as per Section 90 of The Income Tax Act, 1961, and the customer has submitted complete & valid Form 10F and Tax residency certificate with the company. The conditions to get exempt from Section 10(10D) are as below. If you satisfy below conditions then your surrender will not be taxed.
– premium in any year is more than 20% of the sum insured if it were bought after 1st April 2003 but before 31st April 2012
– or is more than 10% of the sum insured if it were bought after 1st April 2012
– or is more than 15% of sum assured for policies bought after 1st April 2013 for disabled or those suffering from ailments (as per section 80DDB).
You no need to submit other than PAN for TDS.