Clarification/guidelines regarding non deduction of TDS on payouts of PLI/RPLI policies in case of submission of Form 15G/15H by the insurgents

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 1.02.2025

To,

The All Heads of Circle.

Subject: Clarification/guidelines regarding non deduction of TDS on payouts of PLI/RPLI policies in case of submission of Form 15G/15H by the insurgents-reg.

Sir/Madam,

Kindly refer to this Directorate's letter number 65-02/2023-LI dated 22.09.2023 (Copy enclosed) vide which clarification/guidelines about deduction of TDS on payment of PLI/RPLI policies, as applicable, under section 194 DA of IT Act 1961 were issued.

After implementation of the provision of automatic deduction of TDS on PLI/RPLI payments, some circles have been seeking clarifications/guidelines for settlement of PLI/RPLI payout cases in which insurant has submitted 15G/15H form but the TDS is still deducted automatically by the system.

Keeping this in view, following guidelines are issued for smooth & timely payout of PLI/RPLI policies to the insurants till the time appropriate provision is made in the software for addressing the issue:-

1) No TDS will be deducted if the insurant submits Form 15G/15H under IT Act as per guidelines issued vide this Directorate letter referred above.

2) Since TDS is automatically being deducted by the system at the time of processing PLI/RPLI claims, below mentioned procedure may be followed till the incorporation of the provision of non deduction of TDS upon submission of Form 15G/15H by the insurant, in McCamish IT 1.0 or IT 2.0 project whichever is earliest:-

(a) When an insurant submits Form 15G/15H at the time of claim payment of PLI/RPLI policy, no TDS will be deducted. For details, letter dated 22.9.2023 may be referred.

(b) Since TDS is being deducted automatically by the system, the following accounting entry is to be passed manually in F&A CSI-SAP to refund the TDS amount to the insurant:-

(c) A separate register is to be maintained by the CPCS/HOS for PLI/RPLI policies on which TDS is not deducted on provision of Form 15G/15H & a monthly consolidated report on refund of TDS on PLI/RPLI claims should be sent to the respective GM (PAF) by 10th of the following month for monitoring & reconciliation.

Encl: As above

Yours Sincerely,

(Deepak Ashish Kaul)

General Manager (Finance)

Copy for information to:

All Heads of PAO.