My client (A) has taken insurance policy in the name of his minor son (B) 20 years back. He paid all the premium on this policy.
Now his son Y has became major. Being major he got the insurance policy maturity amount in his account directly. He doesn’t have any income in India. Hence never filed IT returns.
His son B went to USA for higher study before 9 years. He also got the green card during this period. During this 9 years he never stayed in India for more than 181 days. Last two and half years he didn’t come to India.
I need guidance on the following.
a) Income of LIC maturity proceeds – whether taxable in India or not in B’s hand?
b) Can B take this money to USA? If yes then form 15CA /15CB requirement applicable to him?
c) Can B give this as loan / gift to his father A ?
d) Can A take this money and then send it to USA to B’s account?
Opinion :
a) Income of LIC maturity proceeds will not be taxable in India.
b) B can take this money to USA under LRS and so may not required 15CA/15CB.
c) B can freely give this as loan / gift to his father A.
d) The insurance company release the fund to the beneficiary and so I think A may not be able to take this money.
