How to Surrender an LIC Policy ??

Why we are thinking to surrender the policy while we take it to secure future from financial Problem or Unexpected other risk. Some time we take to save tax U/s.80C also.

REASON TO SURRENDER : 

There may be so many reasons to get it surrender. Might be you are not satisfy with the term & conditions or having some financial problem.

But before going to surrender your policy bond,  you need to check that does your policy has surrender values.

All endowment or money back insurance plans accrue a surrender value after certain (lock-in) period.

Generally insurance policies acquire surrender value completions of three years of your policy. This may varies than the amount of premium paid.

Remember Term Insurance / Health Insurance policies are pure protection plans and do not accrue any surrender value.

Once you have decided to surrender your policy, here is how you go.

REQUIRED DOCUMENTS : -

I.   Original Policy Bond / Certificate

II.  Photocopy of last premium payment receipts

III. Photocopy of latest unit balance (in-case of market linked plan)

IV.  Application for surrender value or LIC SurrenderRequest Letter

V.   LIC Form No. 3510/5074

VI.  LIC NEFT Mandate Form

VII. One Cancelled Cheques / Photocopy of Passbook (NEFT/RTGS Purposes)

All forms are self explanatory, fill all the forms accordingly and have some revenue stamps may require. With the above documents visit your home /servicing branch (office from where policy bond is issued). You can find it on your policy bond or on policy receipts. Only Policy holders can surrender the Policy Bond.

After verification all documents LIC officer will issue an Acknowledgement Receipts for the same. Surrendered process may take 15-20 days and the amount (Surrender Value) will be credited into your bank account directly.

POINTS TO REMEMBER : -

1. Surrender values are payable only after three full annual premium paid.

2. Surrender of policy is not recommended since the surrender value would always be proportionately low.

3. And When you decide again to go for an LIC Policy that would be with higher premium because of your    

    higher age .

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Income Tax Slabs & Rates for Assessment Year 2016-17

Knowing tax rates will help to invest proper to save tax and save money. Here it is listed for your help. Check your taxable limits and tax exemption limits. Income Tax Slabs & Rates for Assessment Year 2016-17 pertaining to F. Y. 2015-16.

I. Individual resident aged below 60 years(i.e. born on or after 1st April 1956)

Income Tax :

	Income Slabs		Tax Rates
1	Where the taxable income does not exceed Rs. 2,50,000/-.		NIL
2	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.		10% of amount by which the taxable income exceeds Rs. 2,50,000/-. Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.
3	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.		Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
4	Where the taxable income exceeds Rs. 10,00,000/-.		Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge

II Senior Citizen(Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year i.e. born on or after 1st April 1936 but before 1st April 1956)

Income Tax :

	Income Slabs		Tax Rates
1	Where the taxable income does not exceed Rs. 3,00,000/-.		NIL
2	Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-		10% of the amount by which the taxable income exceeds Rs. 3,00,000/-. Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.
3	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-		Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
4	Where the taxable income exceeds Rs. 10,00,000/-		Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

III. Super Senior Citizen(Individual resident who is of the age of 80 years or more at any time during the previous year i.e. born before 1st April 1936)

Income Tax :

	Income Slabs		Tax Rates
	Where the taxable income does not exceed Rs. 5,00,000/-.		NIL
	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-		20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
	Where the taxable income exceeds Rs. 10,00,000/-		Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

IV. Any NRI or HUF or AOP or BOI or AJP

Income Tax :

Income Slabs			Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.		NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.		10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.		Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.		Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 10% of the Income Tax, where taxable income is more than 

Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

V. Co-operative Society

Income Tax :

Income Slabs			Tax Rates
i.	Where the taxable income does not exceed Rs. 10,000/-.		10% of the income.
ii.	Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.		Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii.	Where the taxable income exceeds Rs. 20,000/-		Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than 

Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VI. Firm : 

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than 

Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VII. Local Authority :

Income Tax : 30% of taxable income.

Surcharge : 10% of the Income Tax, where taxable income is more than 

Rs. 1 crore.  (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VIII. Domestic Company :

Income Tax : 30% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

IX. Company other than a Domestic Company (Foreign Company 

Income Tax :

• @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
• @ 40% of the balance

Surcharge :

The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under

• At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

Marginal Relief in Surcharge

When an assessee’s taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in.

Example In case of an individual assessee (< 60 years) having taxable income of 
Rs. 1,00,01,000/-

1.	Income Tax	Rs. 28,25,300
2.	Surcharge @12% of Income Tax	Rs. 3,39,036
3.	Income Tax on income of  Rs. 1 crore	Rs. 28,25,000
4.	Maximum Surcharge payable (Income over Rs. 1 crore less  income tax on income over  Rs. 1 crore)	Rs. 700/- (1000 – 300)
5.	Income Tax + Surcharge payable	Rs. 28,26,000
6.	Marginal Relief in Surcharge	Rs. 3,38,336/-     (339036 – 700)

Suggestion : Kindly refer Income Tax website for more info. 

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