Neethu (CA) (138 Points)
01 November 2013If a ULIP Policy which was issued in 2005 was surrendered before the completion of 5 years, then what will be the tax treatment of proceeds ? Will it be taxable or not? What about deduction claimed in earlier years in respect of premiums paid ? Will it be treated as income in the year of surrender?
What would be the treatment if the policy is surrendered after the completion of 5 years?
Mihir
(Wealth Manager)
(5293 Points)
Replied 02 November 2013
ULIP is not a good investment. If you calculate the net rate of returns on ULIP, your gain is even lesser than bank saving interest.
ULIP has a lock-in period of 5 years. And if you surrender the policy before 5 years, the deduction availed toward payment of premium in the previous years, becomes taxable income.
Puja Shah
(Service)
(112 Points)
Replied 30 November 2015
Whether capital gain tax is levied on such withdrawal?
CAclubindia
