Summary: LIC’s New Jeevan Shanti is a non-linked, non-participating, individual, single-premium deferred annuity plan designed to provide annuity after a selected deferment period. LIC’s current pension-plan page lists it as Plan No. 758 with UIN 512N338V08. The plan offers single-life and joint-life structures and fixes annuity rates under the policy terms. Because an annuity is a long-duration insurance contract rather than a bank deposit, purchasers should examine liquidity, death benefit, inflation, tax, GST and family-income requirements before committing a lump sum.
What LIC New Jeevan Shanti Is
LIC’s New Jeevan Shanti is a non-linked, non-participating, individual, single-premium deferred annuity plan. LIC’s current pension-plan listing identifies the product as Plan No. 758 with UIN 512N338V08. The essential structure is that the purchaser pays a single premium, chooses the permitted annuity option and deferment terms, and the annuity becomes payable after the deferment period for the lifetime covered by the selected option.
It is important to distinguish an annuity from a bank deposit or mutual fund. The policy is an insurance contract with guaranteed annuity rates fixed under the policy terms. It is not an equity participation product and does not earn a discretionary bonus merely because LIC’s investment experience is favourable.
Single Life and Joint Life Options
The plan provides a choice between a single-life deferred annuity and a joint-life deferred annuity. Under a single-life structure, the annuity is linked to the life of the annuitant. Under a joint-life structure, benefits depend on the survival of the primary and secondary annuitants in accordance with the policy conditions.
The choice should be made by reading the current sales brochure and benefit illustration. An annuity option, once chosen, is generally not something to treat as a short-term investment switch. The buyer should consider family income needs, liquidity, nomination and the death-benefit mechanism before purchase.
Deferment and Annuity Payment Modes
A deferred annuity does not begin paying immediately. The policyholder selects a permitted deferment period and annuity payment mode under the current product terms. The earlier sales brochure describes yearly, half-yearly, quarterly and monthly modes. The current version should be checked at purchase because product versions and parameters can be revised.
During deferment, the contract follows the death-benefit terms rather than paying the regular annuity. After deferment, annuity is paid in arrears according to the selected mode while the relevant annuitant or annuitants remain alive under the chosen option.
Death Benefit and Liquidity Considerations
The product provides a death-benefit mechanism and options for the manner in which death benefit may be taken, subject to the current policy wording. Prospective purchasers should not equate this with an unrestricted savings-account balance. Annuity products trade liquidity for a contractual lifetime-income structure.
Before purchase, examine surrender, loan and death-benefit provisions in the current policy document. If emergency liquidity is a priority, the purchaser should understand exactly what value can be accessed, when, and on what terms rather than assuming the original single premium can always be withdrawn at will.
Income-Tax and GST Considerations
The Income-tax Act, 2025 has applied from 1 April 2026. That transition matters because many familiar concepts continue but section numbers, prescribed forms and reporting architecture have changed. A compliance article for tax year 2026-27 therefore needs to identify the current provision and, where useful, explain the old-law equivalent instead of assuming that readers can translate references themselves. Taxpayers should also distinguish a statutory liability from the mechanics of portal filing: the portal enables compliance, but it does not enlarge or reduce the underlying legal obligation.
Record keeping remains central. A taxpayer or deductor should preserve the source document, computation, challan, acknowledgement, correspondence, working papers and evidence supporting the legal position adopted. Where a return, statement or form is corrected, both the original and corrected versions should be retained so that the audit trail remains intelligible. This is particularly important when the correction changes PAN, residency, consideration, tax rate, deduction amount, challan mapping or another field that can affect credit in the recipient’s tax account.
Tax treatment of life-insurance and annuity products depends on the nature of the payment and the applicable statutory provision. A pension or annuity receipt should not automatically be treated as tax-free merely because it comes from an insurer. The purchaser should distinguish the tax treatment of the premium, annuity receipts and death-related receipts, and should check whether any deduction or exemption conditions actually apply to the specific contract.
GST treatment is also part of the product economics. The insurer’s illustration and premium receipt should be used to identify the applicable tax treatment rather than applying a generic rate from another insurance product. Tax rules can change over the long duration of an annuity contract, so long-term planning should allow for legislative change.
Who May Find the Structure Relevant
A deferred annuity can be relevant to a person who wants to convert a lump sum into a defined future lifetime-income stream and values certainty of contractual annuity over market-linked return. A joint-life option may be considered where income continuity for a spouse or another eligible joint annuitant is important.
That is not a recommendation to purchase. The economic comparison should consider inflation, opportunity cost, liquidity, longevity, alternative retirement assets, tax and estate planning. A guaranteed nominal annuity can still lose purchasing power if inflation remains high.
Useful TaxGuru References
Tax implications of investing in FDs, mutual funds, PMS and AIFs
Frequently Asked Questions
1. Is New Jeevan Shanti a market-linked plan?
No. LIC describes it as a non-linked, non-participating, single-premium deferred annuity plan.
2. Is it an immediate annuity?
No. It is a deferred annuity; payments start after the selected deferment period.
3. Are single-life and joint-life choices available?
Yes, subject to the current policy terms.
4. Are annuity rates guaranteed?
LIC describes the annuity rates as guaranteed at inception under the product terms.
5. Does the policy earn bonus?
As a non-participating product, it is not designed to receive discretionary bonus or share in surplus.
6. Is every annuity receipt tax-free?
No. Taxability must be examined under the applicable income-tax provisions and facts.
7. Can the option be freely changed later?
The chosen annuity option is generally fixed; buyers should verify the current policy wording before purchase.
8. Should the current UIN be checked?
Yes. Product versions can change, so the current UIN and brochure should be verified at purchase.
Key Takeaways
- It is a single-premium deferred annuity, not a market-linked investment.
- Single-life and joint-life structures are available under the current product terms.
- Annuity rates are contractual, but inflation can reduce real purchasing power.
- Liquidity and death-benefit provisions should be reviewed before purchase.
- Annuity receipts should not be assumed to be tax-free.
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Disclaimer: This article is for general informational and educational purposes and is not an insurance, investment, legal or tax recommendation. Product terms, UIN, annuity rates, eligibility, surrender/loan conditions, GST and tax treatment can change. Readers should verify the latest LIC sales brochure, policy document, benefit illustration and applicable law before purchase. TaxGuru, its owners, management, editors, authors, employees and associated persons accept no responsibility or liability for any loss, damage, consequence, decision or action arising from reliance on or use of this material.
