Tax Implication for Redeemed Investment in LIC Profit Plus

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  1. Ravi49

    Ravi49 New Member

    I have invested an amount of Rs 266,000/- in LIC Profit Plus scheme (Table 188-10) during the year 2008 and redeemed the same during October 2015 as the performance was unsatisfactory.

    While trying to file my IT returns now, I find in 26AS, the entire redemption of amount Rs 356, 388/- is shown in the Income Amount column after deduction of TDS of Rs 7,128/- Further the deduction is made against 194C, which is applicable for Contractors.

    My queries are:

    1) My understanding is that TDS should be deducted on the return of the investment only and amount shown in 26A should be only return on the investment and not the gross amount of deduction. With the indication of gross amount as income in 26AS, my income increases to the extent of investment made in 2008 and redeemed in 2015 thus increasing my tax liability.

    2) Whether the TDS deduction by LIC against 194C is correct as the same is applicable for payment to Contractors, which I am not?

    I shall be thankful for your review and advice.
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