Taxes eating away your Hard-Earned income? ULIPs are there for rescue

Guest | Last updated: 16 March 2021

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Quick Summary

Unit Linked Insurance Plans (ULIPs) offer a dual benefit of insurance and investment, helping you secure your family's future while working towards your financial goals. These plans allow a portion of your premium to be invested in various funds, with the flexibility to switch between them. ULIPs provide significant tax advantages, including deductions on premiums paid under Section 80C (up to Rs. 1.5 lakhs) and potential additional deductions if combined with the National Pension Scheme under Section 80CCC. Furthermore, maturity and death benefits received from ULIPs are entirely tax-free under Section 10(10D).

You work hard to earn well so that you can give your family a life of happiness and security. Along with that, you also plan and look for alternative sources to supplement your income, so that you are also able to realize your other dreams and goals in life. However, in the process of doing s

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FAQ :

A Unit Linked Insurance Plan (ULIP) is a two-in-one plan that combines insurance coverage with investment. A part of your premium goes towards insurance, while the rest is invested in various funds.

ULIPs offer tax benefits on both the premiums paid and the maturity or death benefits received, as per different sections of the Income Tax Act.

Under Section 80C, you can claim a deduction on your annual premium payments up to a limit of Rs. 1.5 lakhs, which reduces your taxable income.

Yes, if you also invest in the National Pension Scheme, you can get an additional tax deduction of up to Rs. 50,000 under Section 80CCC, bringing the total potential benefit to Rs. 2 lakhs.

No, the entire maturity benefit or death benefit received from a ULIP is tax-free under Section 10(10D) of the Income Tax Act.