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Clubbing of income on ULIP

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Arun B

Senior Manager

23 Points Posted on 30 November 2025

Hello Esteemed members,

I have come across multiple articles online which mention that if a husband transfers amount to a wife's account and if she subsequenty invests it in a PPF, then the maturity income is not clubbed in husband's income as PPF maturity amount is exempt from income tax.

Does this also apply to ULIP if I pay ULIP premiums for my wife under 2.5 Lakhs per annum?

Replies (4)

Quick Summary

This discussion explores whether income from Unit Linked Insurance Plans (ULIPs) invested by a wife, funded by her husband, is subject to income clubbing. It clarifies that if the ULIP premiums are under £2.5 lakh per annum, similar to PPF investments, the maturity income may not be clubbed with the husband's income due to tax exemptions on maturity amounts.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 30 November 2025

Yes, eligible ...

Arun B

Senior Manager

23 Points Posted on 01 December 2025

Thank you sir, that clears the confusion I have been having for so long !

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 01 December 2025

The reason is same as the redemption amount is tax exempt in both.

Good luck...

Aashok Kumar Sharma

Finance/Compliance Consultant

76809 Points Posted on 07 November 2026

The short answer: Yes, if the annual ULIP premium is under ₹2.5 Lakh, the maturity proceeds are entirely tax-free. Because the income is tax-free, clubbing provisions under Section 64(1)(iv) do not create any actual tax liability for the husband.
The caveat: Ensure that total aggregate premiums for post-Feb 2021 ULIPs stay under the ₹2.5 Lakh limit; otherwise, capital gains tax rules apply, and taxable gains will be clubbed back to the transferor spouse.