Q.Mr. Ghosh received a sum of money on the maturity of a life insurance policy taken on his own life. State, with reasons, whether this receipt is taxable, citing the relevant exemption section.

Maturity proceeds of a life insurance policy are generally, though not unconditionally, kept outside Total Income.

Under Section 10(10D), any sum received under a life insurance policy — including any bonus allocated on the policy — is generally exempt from tax in the hands of the person receiving it, whether that is the policyholder on maturity (as in Mr. Ghosh's case) or a nominee on the death of the insured. The exemption is not, however, unconditional: the section lays down specific conditions, relating among other things to the relationship between the premium paid and the sum assured on the policy, and to policies covering a person with a disability or a specified disease. This chapter deliberately does not quote the exact numeric conditions (they are a Finance-Act-linked figure, not a syllabus-fixed fact for this unit — see the Assessment Year grounding note in …

Treating every life insurance receipt as UNCONDITIONALLY exempt — Section 10(10D)'s exemption is subject to conditions in the section itself; a policy that fails those conditions can lose the exemption, so 'generally …