future plus

dasd (Querist) 22 December 2009 This query is : Resolved

i had invested Rs10000 in lic future plus in FY 2005-06.i got Rs13619 on maturity dated 13/7/2007 i.e. FY 2007-08. my query is whether gain on this fund will be chargeable to tax under the head LTCG or since it is LTCG on listed security ---exempt under sec. 10(38)?

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A V Vishal (Expert) 22 December 2009
Unlike in the case of any insurance product where redemption or surrender amount is not taxable, the surrender value under a pension product is taxed in the hands of the individual.
Since Future Plus is a pension plan and falls under section 80CCC of the Income Tax Act, the surrender value is taxable in the hands of the policyholder. On redemption, an individual can receive one third of the redemption amount tax free and from the balance purchase annuities at the then prevailing rates.