TAXABILITY OF GSLI SAVINGS ACCUMULATIONS ON RETIREMENTS

Regn No.PN 4769 (Regd under The Trade Unions Act, 1926)

(Affiliated to Bharateeya Mazdoor Sangh)

BMS Office, Vishwakarma Bhavan, 185, Shaniwar Peth, Pune 411030

President: Prabir Kumar Mazumder Mob No: 9330337430 Prabir.majumdar@gmail.com Working President: Arvind Mittimani Mob No: 9868878667 arvindmittimani@gmail.com

General Secretary: Rajiv Kumar Sharma Mob No: 9811902770

rajivkumarsharma1558@gmail.com

Date: 10th July 2026

To, The Executive Director (OS) L. I. C. of India, Central Office, Yogakshema, west Wing, 4th Floor, Nariman Point, Mumbai-400021

Subject :TAXABILITY OF GSLI SAVINGS ACCUMULATIONS ON RETIREMENTS

Dear Sir,

Refund of GSLI Savings Accumulations on retirement is FULLY EXEMPT from Income Tax under section 10(10D) of Income tax act as proceeds of Insurance Policy. However, while filing Income tax return under E-portal of Income Tax Dept., there is no provision to show exemption u/s 10 (10D), as it is a reporting item only, like income from Agriculture, Refund of P. F. Accumulations on retirement etc. Because of this reason, GSLI Savings Accumulations should NOT be reported by LIC to Income Tax Dept.

However, we have observed that, all Divisional Offices across India are wrongly reporting this item as Income and adding it in Gross Total Income and thereafter showing "Any other exemption under Section 10 (Item no. A 2(h) of form no. 16) [which is not possible in E-portal]. Due to this mistake or misunderstanding on the part of Divisional Offices, many retired employees are required to pay Tax on income which is not taxable.

Now, the only remedy available with Divisional Offices is to reduce the reported income of the concerned retired employee (to the extent of GSLI Accumulations) by filing revised Quarterly Returns for the quarter in which that income is paid. Since 31/07/2026 is the last date for filing Income Tax Returns, revised QLY returns should be filled by the Divisional Offices as early as possible. After filing of revised QLY returns, Income Tax Dept. takes 2/3 days to reflect the correct income on their E -portal.

We request you to kindly instruct all offices to take necessary corrective action in cases of employees retired during the financial year 2025-26.

Further, we also request you to make modifications in E-feap Terminal Benefits Module, so that amount paid towards refund of GSLI Savings Accumulations will be excluded while filing QLY returns by the offices paying terminal benefits.

Thanks & Kind Regards

Rajiv Kumar Sharma 

General Secretary