Section 56(2)(xiii) — the law in short
What the courts have decided on section 56(2)(xiii), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CBDT Circular 15/2023 on the Rs 5 lakh premium test
CBDT Circulars & InstructionsCuts both ways
My client holds four life policies with different premiums and different maturity dates. How do I work out which of them still come out exempt under s.10(10D)?
The circular is the Board's own worked answer to that question. It lays down that the Rs 5,00,000 test is applied afresh in each year in which a sum is received, by aggregating the premium payable on the policy being tested with the premium on every other eligible policy on which exemption has already been claimed, and it tells the assessee he may choose which combination of policies to claim on. It also settles two points the section does not: premium is taken exclusive of GST, and a pure term policy is outside the sixth and seventh provisos altogether and does not count towards the aggregate.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.