Microlesson · 5-min read

Section 194DA — Maturity of Life Insurance Policy

# Section 194DA — TDS on Maturity Proceeds of Life Insurance Policy

## Who deducts?

Payer: Any person paying maturity / surrender amount on a life insurance policy.
Payee: Resident.

## Threshold

Payment ≥ ₹1,00,000 in a financial year.

## Rate

5% — applied on the income component (i.e., amount paid minus premiums paid by the assured), NOT on the full sum.

## When?

At the time of payment.

## Note

Worked example

### Example 1

Example: Maturity proceeds ₹6,00,000, total premium paid ₹4,00,000. Income = ₹2,00,000. TDS u/s 194DA @ 5% = ₹10,000.

### Example 2

Example: Policy whose maturity is exempt under Sec 10(10D) — no TDS even if amount exceeds ₹1,00,000.

Deducting TDS on the gross maturity proceeds rather than only on the income portion.
Applying 194DA to commission paid to insurance agent (that's 194D).

Reference: 194DA

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