Calculate TDS on taxable life insurance payouts with the 194DA TDS Calculator. Estimate the income component, 2% TDS and net payout for resident recipients under the applicable 2026 rules.
The Section 194DA Life Insurance Payout TDS Calculator estimates TDS on a taxable life insurance payout to a resident. For Tax Year 2026-27, the corresponding provision is Section 393(1), Table Serial No. 8(i), of the Income-tax Act, 2025. The current TDS rate is 2% on the income comprised in the payout, with a ₹1,00,000 threshold. Official Section 393
This calculator helps resident policyholders estimate TDS on a taxable life insurance payout. It's also useful for nominees, insurance advisers, CAs and tax professionals checking a maturity or surrender payment.
Section 194DA is the familiar provision under the Income-tax Act, 1961. For Tax Year 2026-27, the corresponding TDS rule appears in Section 393(1), Table Serial No. 8(i), of the Income-tax Act, 2025. The new Act applies from 1 April 2026. Income-tax Act, 2025
For a taxable receipt covered by the rule:
Income component = Life insurance payout − aggregate premiums paid during the policy term and not claimed as a deduction
TDS = Income component × 2%
Under Section 393(1), TDS applies when the payment or aggregate payments exceed ₹1,00,000. At exactly ₹1,00,000, the amount does not exceed the threshold, so this table entry does not trigger TDS. Official Section 393
Section 92(2)(l) sets the taxable income rule for a covered life insurance receipt. It covers a sum, including bonus, that isn't excluded from total income under Schedule II, with the taxable amount being the excess over aggregate premiums paid during the policy term and not claimed as a deduction. The clause excludes sums received under a unit linked insurance policy and income covered by its Keyman provision. Official Section 92
Schedule II excludes qualifying life insurance receipts when its conditions are met. For policies issued on or after 1 April 2023, the conditions include premium-to-sum-assured limits and specified aggregate premium limits. Death proceeds have separate treatment under the Schedule II conditions. Official Schedule II
Suresh receives a taxable life insurance payout of ₹8,00,000. He has paid ₹5,00,000 in qualifying premiums during the policy term.
Income component = ₹8,00,000 − ₹5,00,000 = ₹3,00,000
The payout exceeds the ₹1,00,000 threshold.
TDS = ₹3,00,000 × 2% = ₹6,000
Suresh therefore sees estimated TDS of ₹6,000.
Amount after TDS = ₹8,00,000 − ₹6,000 = ₹7,94,000
If Schedule II excludes the receipt from total income, this TDS calculation doesn't apply to the excluded amount. Official Schedule II
The current Section 393 table applies to payments to residents. A non-resident recipient requires a separate review under the non-resident TDS provisions in Section 393(2). Official Section 393
Tax Year 2026-27 uses the Income-tax Act, 2025, which applies from 1 April 2026. The life insurance TDS entry is Section 393(1), Table Serial No. 8(i). Income-tax Act, 2025
The rate is 2% on income comprised in a qualifying life insurance sum. The threshold is ₹1,00,000, and Section 393(1) triggers deduction when the amount or aggregate amount exceeds the threshold. Official Section 393
The historical Section 194DA rate changed from 5% to 2% with effect from 1 October 2024. The 2024 Budget announced that change for payments under life insurance policies. Union Budget 2024 — TDS rate changes
The Income-tax Act, 2025 places taxable high-premium life insurance receipts under Section 92(2)(l). The taxable amount is the sum exceeding aggregate premiums paid during the policy term and not claimed as a deduction, subject to the clause's exclusions. Official Section 92
Schedule II contains the exclusion conditions. For policies issued on or after 1 April 2023, specified policy types face aggregate premium limits of ₹2,50,000 or ₹5,00,000, along with premium-to-sum-assured conditions. Policies issued by an IFSC Insurance Office on or after 1 April 2025 have a specific exception to those aggregate premium limits. Official Schedule II
Eligible taxpayers can use Form No. 121, the 2026 replacement for Forms 15G and 15H, under Section 393(6) and 393(7), when they meet the prescribed conditions for a nil-tax declaration. Official Form 121 guidance Official Form 121 FAQs
For Tax Year 2026-27, Section 393(1), Table Serial No. 8(i), specifies TDS at 2% on the income comprised in a life insurance sum covered by the provision. The rule applies to payments to residents, and Section 393(1) uses a ₹1,00,000 threshold for the payment or aggregate payment during the tax year. Official Section 393
Section 194DA is the section number used under the Income-tax Act, 1961. From 1 April 2026, the Income-tax Act, 2025 applies, and the corresponding resident life insurance TDS entry is Section 393(1), Table Serial No. 8(i). The old section number remains useful when checking historical transactions. Income-tax Act, 2025
No. The current TDS table specifies 2% on the income comprised in the life insurance sum. For a taxable receipt, Section 92(2)(l) uses the amount exceeding qualifying aggregate premiums paid during the policy term. Schedule II exclusions must be checked before calculating taxable income. Official Section 92 Official Schedule II
Section 393(1) requires the amount or aggregate amount to exceed the stated threshold before TDS applies. Therefore, a payment of exactly ₹1,00,000 doesn't cross the threshold. A payment of ₹1,00,000.01 does cross it, subject to the other conditions of the provision. Official Section 393
No. The ₹1,00,000 figure controls TDS under the relevant table entry. It doesn't create a general income-tax exemption of ₹1 lakh. Whether policy proceeds form part of taxable income depends on Section 92 and the exclusion conditions in Schedule II. Official Section 393
For the covered receipt under Section 92(2)(l), the taxable amount is the sum exceeding aggregate premiums paid during the policy term and not claimed as a deduction, subject to the statutory exclusions. The provision also excludes sums received under a unit linked insurance policy and income covered by its Keyman provision from that clause. Official Section 92
No. TDS is a withholding amount. Final tax depends on your total taxable income and the provisions applicable to you. If the tax deducted exceeds your final liability, the excess can form part of a refund claim through the normal return process.
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