Skip to content

CA Final · Direct Tax Laws & International Taxation · Capital Gains

Meera holds a specified unit linked insurance policy covered by section 2(22)(c) with total premiums of ₹10,00,000 payable over its term. In the current tax year she receives an amount for the first time, ₹9,50,000 in all, which includes a bonus allocation of ₹50,000. Premiums actually paid until the date of receipt total ₹6,00,000. Under Rule 49 of the Income-tax Rules, 2026, what are her capital gains on this receipt?

The capital gain is ₹3,50,000. For a first receipt, Rule 49 deducts the premiums paid till the date of receipt (₹6,00,000) from the amount received including bonus (₹9,50,000). Premiums not yet paid are ignored and the bonus is included.

  1. A₹3,00,000
  2. B₹3,50,000Correct
  3. C₹9,50,000
  4. DLoss of ₹50,000

Explanation

For a first-time receipt, the gain is A – B. A is the amount received including bonus, ₹9,50,000. B is the aggregate premium paid during the term till the date of receipt, ₹6,00,000. The gain is ₹3,50,000. Excluding the bonus gives ₹3,00,000, which is wrong because A expressly includes the bonus. Using the total premium payable of ₹10,00,000 gives a loss of ₹50,000, which is wrong because only premiums paid till the date of receipt count.

Did you get it right without looking?

One question tells you little. A timed set on Capital Gains shows your real accuracy, how long you take and where you lose marks.

Practise Capital GainsFree diagnostic mock

More Capital Gains questions