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Section 194DA relates to the deduction of TDS in respect of life insurance policy, and the provisions of the same are covered under the present article.

Basic provisions of section 19DA

Section 194DA of the Income Tax Act, 1961 covers the person making payment to a resident person any sum under the life insurance policy. It is important to note that section 194DA includes the sum allocated by way of bonus.

Rate of TDS under section 194DA of the Income Tax Act, 1961

The Deductor, liable to deduct TDS as per provisions of section 194DA of the Income Tax Act, 1961, is required to deduct TDS @ 1%.

However, in the Union Budget, 2019, it has been proposed to increase the rate of TDS deduction from 1% to 5% and the same would be effective from 1st September 2019.

In case the PAN is not furnished, the Deductor is liable to deduct TDS at maximum marginal rate i.e. 20%.

Time of deduction of TDS –

As per provisions of section 194DA, the Deductor is required to deduct TDS at the time of payment.

Cases wherein TDS is not deductible –

  • TDS is not deductible in case life insurance policy qualifies under section 10 (10D).
  • No TDS deductible if the aggregate amount of payment during the financial year is less than INR 1,00,000.

Various due dates –

1. Due date of deposit of TDS with the Government –

The Deductor is required to deposit the deducted TDS within a period of 7 days from the end of the month in which the TDS is deducted.

However, in the case of TDS deducted in the month of March, the same is to be deposited on or before 30th April.

2. Return filing due dates

The Deductor is required to file quarterly TDS return in Form 26Q within following dates –

  • Quarter April to June – 31st July
  • Quarter July to September – 31st October
  • Quarter October to December – 31st January
  • Quarter January to March – 31st May

3. Issuance of TDS certificate

The Deductor is required to issue TDS certificate in Form 16A within a period of 15 days of the filing of the quarterly TDS return. The respective due dates would be –

  • Quarter April to June – 15th August
  • Quarter July to September – 15th November
  • Quarter October to December – 15th February
  • Quarter January to March – 15th June

Also Read-

TCS – Tax Collection at Source – A Complete Guide
TDS Rate Chart for Financial Year 2019-2020
Section 192 – TDS on Salary
Section 192A – TDS on Premature withdrawal from EPF
Section 193: TDS on Interest on Securities
Section 194 – TDS on dividend
Section 194A: TDS on interest other than interest on securities
Section 194B and Section 194BB – TDS
Section 194C – TDS on Contractors
Section 194D – TDS on insurance commission
Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association
TDS under Section 194EE and Section 194F
Section 194G TDS on Commission on Sale of Lottery Tickets
Section 194H – TDS on Commission or Brokerage
Section 194I of Income Tax Act, 1961 – TDS on Rent
Section 194IA TDS on transfer of immovable property
Section 194IB – TDS on Rent paid by Individual / HUF
Section 194LA: Payment of Compensation on acquisition of certain immovable property
TDS under Section 194LB, 194LBA, 194LBB and 194LBC
Section 194LC: TDS on income by way of interest from an Indian Company or a business trust
Section 194LD TDS on income by way of interest on certain bonds and Government Securities
Section 194J TDS on Fees for Professional or Technical Services
Section 194N – TDS on Cash Withdrawals
Section 194M: TDS on Payment of certain sum by certain Individual / HUF
Section 195 TDS on payment of any other sum to a non-resident

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  1. ALOKE KANUNGO says:

    I have a LIC policy buy on 08/12/2013. by paying Rs 298177 as premium for SA Rs410000. I got a Money back of Rs61500 on 2016 and 2019 without any TDS.
    But at the time of maturity on December 2022 (maturity value Rs343277) TDS being made by clubbing the amount Rs61500*2, which i get on 2016 and 2019. I think TDS should be only on Rs343277, the maturity value less Rs298177 which i paid as premium. please let me know the correct procedure of TDS calculation.
    with regards
    Aloke Kanungo

  2. Tryambk says:

    purchase sbilife insurance in 2010 by paying 100000/- single premium. in 2018 received 123000/- with tds deduction u/s 194da . how it will reflect on my income tax return whenever i have 660000/- gross total income?

  3. Harold Dsouza says:

    Received a sum of Rs 976160.16 after TDS of Rs 15405 was deducted by ICICI Prudential Life Insurance Company under Sec 194DA. Please guide me where this amount will reflect in my IT Return for AY 2020-21

  4. Ajit Vad says:

    purchsaed ICICI pru life insurance policy in 2013,which was prematuarly redemed in June 2019.Received 567499 with TDS u/s it will reflect in my IT returns.My Gross income 4L.
    please advise as i file my own returns online.

  5. GAIKWAD says:

    purchase hdfc life insurance in 2013 by paying 100000/- premium after that no premium paid . in 2018 received 151000/- with tds deduction u/s 194da . how it will reflect on my income tax return whenever i have 350000/- gross total income?

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April 2024