If 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?
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.
Whether capital gain tax is levied on such withdrawal?
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