GSV-only LIC surrender value floor estimate per IRDAI 2024 schedule. Form 5074 process, 7-15 day payout, lost-bond Form 3815 procedure, jargon decoded.
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Enter premium net of all GST regardless of when paid. Currently 0% on individual life insurance (effective 22 Sep 2025 per GST 2.0 reform). Pre-reform: 4.5% Y1 / 2.25% Y2+ on traditional plans; 18% on term insurance. Most policy receipts show the net figure separately.
Whole years only.
Original sum assured shown on your policy bond. Must be greater than zero.
Per Finance Act 2023 + CBDT Rule 11UACA, if your aggregate annual premium across ALL non-ULIP policies exceeds Rs 5 lakh in any year of the policy term (not just this year), the surrender value loses Section 10(10D) exemption. We need this answer to flag your tax exposure correctly.
Excluded from GSV calculation per IRDAI rule. Shown for transparency.
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GSV-only LIC surrender value floor estimate per the IRDAI Master Circular (June 2024) for policies issued on or after 1 October 2024, OR the legacy IRDAI 2013 schedule for older policies. Scoped to Endowment + Whole Life only; Money-Back / Annuity / Pension / ULIP gated at the input layer. Hard constraint: NO Special Surrender Value (SSV) computation, NO bonus surrender value computation - LIC does not publicly publish those factor tables, and aggregator sites that show estimated SSV are fabricating numbers. Differentiation moat is operational guidance: Form 5074 process, 7-15 day NEFT payout, lost-bond Form 3815 procedure with 3-tier threshold ladder, jargon decoded for Vested Bonus / Paid-Up Value / SSV. Tax-flag panel surfaces the two-prong Section 10(10D) test (10% premium-to-SA ratio AND Rs 5 lakh aggregate cap per Finance Act 2023, evaluated for any year per CBDT Rule 11UACA), 2% Section 194DA TDS on aggregate-premium income portion (NOT GSV-base income portion - the IRDAI Y1 exclusion is a GSV rule, not an income tax rule), and Section 80C reversal for surrender within 2 years. Surrendering is irreversible.
| Plans supported | Endowment, Whole Life. Money-Back / Annuity / Pension / ULIP use different math; gated at input. |
| Surrender value floor (legacy regime, pre-Oct 2024 policy) | Eligible from Year 3. Year 3 = 30%, Years 4-7 = 50%, Years 8 to (term-2) = flat 50% (IRDAI 2013 minimums do not pin higher), last 2 years = 90%. |
| Surrender value floor (new regime, post-Oct 2024 policy) | Eligible from Year 2 (SSV from Year 1, not computed). Year 2 = 30%, Year 3 = 35%, Years 4-7 = 50%, Years 8 to (term-2) = flat 50%, last 2 years = 90%. |
| Single premium GSV | 75% from year 1 to (term-2), 90% in last 2 years (both regimes). |
| Excluded from GSV "premiums paid" base | First-year premium (regular pay only), rider premiums, extra premium, GST. NOTE: this exclusion is for IRDAI GSV only; Section 194DA TDS uses aggregate premium WITHOUT first-year exclusion. |
| Vested bonus surrender | LIC plan-specific factor; not publicly published. Get from servicing branch. |
| SSV (Special Surrender Value) | Computed by LIC actuarially via internal asset-share model; not publicly published. LIC pays the higher of GSV or SSV. |
| Surrender process (intact bond) | Form 5074 + NEFT mandate + original bond + PAN + Aadhaar + cancelled cheque, submitted at servicing branch (standard, fastest path). Any authorised LIC branch can also accept. |
| Surrender process (lost bond) | Form 3815 (NOT 3756 - that is for no-claim duplicate). Typical 3-tier ladder: around Rs 5,000 or below no bond; around Rs 5,000-10,000 Form 3815-A indemnity letter; above approximately Rs 10,000 Form 3815 notarized + 1-month newspaper advertisement. Confirm exact thresholds with your servicing branch (LIC may revise). |
| Payout window | 7 to 15 working days from submission via NEFT. |
| Section 80C reversal | If surrendered in less than 2 years for traditional plans, 80C deductions actually claimed in earlier returns are reversed and taxed in the surrender year. |
| Section 10(10D) two-prong test | Exempt only if (a) annual premium <= 10% of SA (20% for pre-Apr-2012 policies) AND (b) for policies issued on/after 1 April 2023, aggregate annual premium across all non-ULIP policies <= Rs 5 lakh in EVERY year of the policy term. Per CBDT Rule 11UACA, evaluated for any year (NOT just surrender year); if aggregate ever exceeded Rs 5 lakh in any prior year, Prong 2 fails retroactively. |
| Section 194DA TDS | 2% on income portion (Finance Act 2024, effective 1 Oct 2024; was 5% before). Income portion = payout - aggregate premiums paid (NO first-year exclusion - that is an IRDAI rule, not income tax rule). Triggers when payout > Rs 1 lakh AND 10(10D) fails. |
| GST on premium | 0% on individual life insurance from 22 Sep 2025 (GST 2.0 reform). Pre-reform: 4.5% Y1 / 2.25% Y2+ on traditional plans; 18% on term. |
The Guaranteed Surrender Value (GSV) is calculated as Total Premiums Paid minus First Year Premium minus Rider Premiums minus GST, multiplied by a GSV factor. The factor varies by year of surrender, total policy term, and which IRDAI regulatory regime applies. Two regimes: policies issued before 1 October 2024 follow IRDAI Linked + Non-Linked Insurance Products Regulations 2013 minimums (Year 3 = 30%, Years 4-7 = 50%, last 2 years = 90%). Policies issued on or after 1 October 2024 follow the IRDAI Master Circular June 2024 schedule (Year 2 = 30%, Year 3 = 35%, Years 4-7 = 50%, last 2 years = 90%). Per the IRDAI Master Circular, Special Surrender Value (SSV) is also payable from Year 1 onward under the new regime - we do not compute SSV (LIC's asset-share factors are not publicly published) but surface the eligibility note in the calculator.
The calculator scope is intentionally narrow: Endowment and Whole Life policies only. Money-Back, Annuity, Pension, and ULIP plans are gated at the input layer. Money-Back surrender involves survival benefits already paid that we do not model precisely; Annuity / Pension uses payout-cessation math; ULIP uses NAV-based math with a separate 5-year Section 10(10D) lock-in. Shipping a narrow correct calculator beats shipping a wider approximate one on a YMYL surrender-value page.
Critical distinction: GSV base vs income tax base. The IRDAI rule excludes the first-year premium from the GSV computation. This exclusion is a GSV computation rule ONLY - it is NOT an income tax rule. Section 194DA defines the income portion as payout minus AGGREGATE premiums paid (no first-year exclusion). The calculator therefore maintains two separate premium totals: premium base for GSV (excludes Y1) for the GSV factor calculation, and aggregate premiums paid for tax (includes Y1) for the 194DA TDS calculation. v2 of this calculator used the GSV base for both, which understated income and TDS by exactly one Y1 premium worth; v3 corrects.
The standard, fastest path to surrender an LIC policy is to submit Form 5074 (Surrender Discharge Voucher) along with the original policy bond, NEFT mandate form, PAN, Aadhaar, and a cancelled cheque at the servicing branch - the LIC branch where the policy was originally issued, printed on the first page of the policy bond. Any authorised LIC branch or collection centre can also accept the form for forwarding to the servicing branch, but the servicing branch processes fastest. For an irreversible high-value action like surrender, in-person submission with acknowledgement is recommended over postal mail; LIC NEFT payout typically follows in 7 to 15 working days. The all-India toll-free helpline is 1800-33-4433.
If your original policy bond is lost AND you are surrendering simultaneously, the form is Form 3815, NOT Form 3756. Form 3756 covers "lost bond, no active claim, want a duplicate" - a different use case. Form 3815 covers "lost bond + active claim (surrender, maturity, or death)." The typical threshold ladder by net claim amount (sourced from BankBazaar / PolicyX walk-throughs, not a primary LIC circular - confirm with your servicing branch as LIC may revise these): around Rs 5,000 or below, no indemnity bond is typically required (claim settled directly with KYC + LIC's loss-circumstances questionnaire). Around Rs 5,000 to Rs 10,000, Form 3815-A indemnity letter is typically used (lighter requirement). Above approximately Rs 10,000 (most surrender claims), Form 3815 notarized on non-judicial stamp paper is typical, plus a 1-month newspaper advertisement (English or local newspaper, in the state where the policy was lost), plus LIC's loss-circumstances questionnaire. The Form 3815 vs 3756 distinction itself is what aggregators frequently get wrong; the precise rupee thresholds are a secondary operational detail to confirm with your branch before submitting.
Guaranteed Surrender Value (GSV) is the IRDAI-mandated minimum the calculator on this page estimates. Special Surrender Value (SSV) is LIC's higher actuarial valuation, computed via internal asset-share factors LIC does not publish. Per IRDAI 2024 regulations, the surrender value paid is the higher of GSV or SSV. SSV must equal at least the present value of paid-up sum assured plus future benefits plus accrued bonuses (less survival benefits already paid), discounted at a rate not exceeding the 10-year G-Sec yield plus 50 basis points. Aggregator sites that show "estimated SSV" are using assumed bonus rates and discount rates that are not LIC's actual numbers.
Vested Bonus refers to accumulated annual bonuses declared by LIC on participating traditional policies. Two types: Simple Reversionary Bonus (declared annually per Rs 1,000 of sum assured) and Final Additional Bonus (paid only at maturity / death for long-tenure policies). On surrender, vested bonuses are paid out at a separate "bonus surrender factor" that varies by year-of-surrender x policy-term. LIC does NOT publicly publish bonus surrender factors; this calculator therefore excludes them from the floor estimate.
Paid-Up is an alternative to surrender. Reduced Sum Assured = (Number of Premiums Paid / Total Number of Premiums Payable) x Original Sum Assured. The policy continues with the reduced sum assured; vested bonuses already declared remain vested but no new bonus accrues from the year of conversion. Paid-Up is often the better choice past Year 5-7 if you do not urgently need the cash because the death cover continues and the reduced SA + vested bonuses pay out at maturity.
Section 80C(5) reversal: if a traditional LIC policy is surrendered before completing 2 full years of premium payment, any Section 80C deductions actually claimed in earlier returns for that policy's premiums are reversed - added back to taxable income in the surrender year, taxed at the user's current slab. (Note: the 5-year reversal rule applies to ULIPs, NOT traditional plans. Aggregators frequently confuse the two; we anchor on Section 80C(5).)
Section 10(10D) exemption is a two-prong test: Prong 1 - annual premium must not exceed 10% of sum assured (20% for policies issued before 1 April 2012). Prong 2 (added by Finance Act 2023, effective 1 April 2023) - for non-ULIP policies issued on or after 1 April 2023, the aggregate annual premium across ALL such policies must not exceed Rs 5 lakh. Per CBDT Rule 11UACA (Notification 61/2023 dated 16 August 2023), the Rs 5 lakh test is evaluated for ANY previous year during the policy term, not just the surrender year. If your aggregate premium ever exceeded Rs 5 lakh in any prior year of any non-ULIP policy you hold, Prong 2 fails retroactively. If either prong fails, the entire surrender value is taxable as Income from Other Sources at your slab rate. Death-claim payouts to nominees remain exempt under all conditions.
Section 194DA TDS at 2%: if the surrender value paid by a single insurer in a financial year exceeds Rs 1 lakh AND the policy fails Section 10(10D) exemption, LIC deducts TDS at 2% on the income portion. Per Finance Act 2024, the rate dropped from 5% to 2% effective 1 October 2024. The income portion is computed as payout minus AGGREGATE premiums paid (no first-year exclusion - this is the income tax rule, distinct from the IRDAI GSV computation rule that excludes Y1). Worked example: payout Rs 10,00,000 minus aggregate premiums Rs 3,00,000 = income Rs 7,00,000; 2% TDS = Rs 14,000. If the income portion is zero or negative (early-year surrender where payout is less than premiums paid), no TDS applies.
Last reviewed against IRDAI Master Circular June 2024, Finance Act 2023, Finance Act 2024, CBDT Circular 15/2023, CBDT Rule 11UACA, and the GST 2.0 reform notification in May 2026. Defaults are illustrative; override with your actual policy details. Form 3815 / 3815-A threshold ladder cited from BankBazaar + PolicyX walk-throughs (cross-confirmation with LIC servicing branch recommended for high-value claims).