Pension plan and tax liability

Hello,

 

I have a ICICI Prudential Super Pension Plan, which I have paid premium for minimum period. The Plan matured in 2017 and have postponed the Vesting till 2020.

 

When I recently visited the ICICI Pru Branch and wanted to redeem, I was told that the entire corpus would be taxable unless I buy annuity with the same company (ICICI Pru). Below are my questions and I request experts to help clarify the same.

 

1. If I redeem now, is my entire corpus going to be considered as income and taxable at my slab (including my premiums)?

2. If I wait till vesting is completed, will I get any tax exemtions?

3. Someone told me that the corpus would be non-taxable since I waited till maturity. Is this true?

4. I understand, if I buy annuty.. this will be tax free. However do I have to buy annuity from ICICI Pru ONLY or redeem and use the amount to buy annuity from another Company - such as HDFC Life etc. who pays better pension?

5. Will I get any benefit if I wait till vesting period is completed or can redeem now?

 

Any clarification will be of great help. Thanks.

 

Regads,

Gopi

Replies (2)
Please provide the Year of Creation of Pension plan, as well as detail of plan in which they advise you to invest.

Have you asked them that if you invest the same in other banks annuity plan, than what is the problem?

RE-investment was insisted by manager?

Hello Rohit,

 

Year of taking the Plan was 2007 and matured in 2017. I extended the vesting till 2020. When asked the Bank, they mentioned that I have to reinvest in the same Bank for annuity. But I understand that I can still go ahead and buy annuity from any other provider, based on my research in the Internet. Please help clarify.

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