Tax Rate on maturity of ULIP
This query is : Resolved
07 December 2024
What is the tax rate at maturity on ULIP (Unit Linked Insurance Plan) that does NOT qualify for capital gain exemption under Section 10(10D)? Is it treated like a mutual fund held long-term? Also, does the distinction between the tax rates for debt and equity apply?
08 December 2024
1. Yes.
2. Yes.
2. Yes.
08 December 2024
In a ULIP, the distinction between debt and equity funds is not always clear. For instance, one can hold x% in a debt fund and the remainder in an equity fund in any combination. Also, one can switch from one fund to another during the life of the ULIP. For example, one can hold a debt fund for the first five years and equity for the last five years. At maturity or surrender of the ULIP would it be considered a debt fund or an equity fund?
08 December 2024
Yes, even in such case the LTCG will be taxed at flat 12.5% without indexation.
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