For policies taken between April 1, 2003, to March 31, 2012, the condition was that the premium shall not exceed 20 percent of the actual capital sum assured. The clauses were not applicable if the amount received was on account of the death of an insured.

"The actual capital sum assured excludes the value of any premium agreed to be returned, as also benefit by way of bonus or otherwise that is over and above the policy amount," said C.L. Baradhwaj, senior vice president, Bharti Axa Life Insurance told IANS.

While life insurers try to ensure that the premium amount is compliant with the Income Tax Act at the product-design stage itself, there are some set of policyholders who could be affected by the new provisions, Baradhwaj said.

"All single-premium policies would be the immediate casualty, as the premia paid in one instalment would generally exceed 10 percent of the sum assured," he said.

He said it is possible that people could be paying premia higher than the 10-20 percent limit set by the new provisions on account of their personal health, as also many other reasons. In such cases, too, the TDS liability could arise.

"It is important to note that a person aged, say, 50 years, pays a higher premium for the same sum assured when compared to a person who is 35 years old. Higher the age, higher risk and higher the premium," Baradhwaj added.