Deduction of TDS @ 5% on payment of maturity of PLI/RPLI policies exceeding Rs.1lakh during a financial year

Deduction of TDS @ 5% on payment of maturity of PLI/RPLI policies exceeding Rs.1lakh during a financial year

F. No. 65-02/2023-LI

Govt. of India

Ministry of Communications

Department of Posts

Directorate of Postal Life Insurance

Chanakyapuri PO Complex, 

New Delhi - 110 021.

Dated 09.08.2023

To

All Heads of Circle

Subject: Deduction of TDS @5% on payment of Maturity of PLI/RPLI policies exceeding Rs. 1 lakh during a financial year - reg.

It has come to notice of this Directorate that the provisions of 194DA of the Income Tax Act were not followed by the field units and TDS @5% is not being deducted during maturity claim of PLI/RPLI policies exceeding Rs. 1 lakh (except Death claim as per Sec 10D) during a financial year. Non- deduction of TDS from the maturity proceeds of PLI/RPLI policies has resulted Audit paras.

In this regard, it is intimated that in present scenario there is no provisions in McCamish software to deduct the TDS from the maturity value at the time of processing of maturity claims. Submission of PAN is also not mandatory. Matter has been taken up to incorporate the same in the system.

Meanwhile, it is requested to kindly issue necessary instructions to all concerned for deduction of TDS @5% at the time of maturity of PLI/RPLI policies as applicable as per the provisions of Sec 194DA of IT and its amendment of 2019.

This is issued with the approval of CGM (PLI).

(Sachidanand Prasad)

General Manger (Finance)