Tax implication for ULIP Surrender after 7 years (No lock-in but premature surrender)

Tax queries 127 views 2 replies

HDFC LIFE ULIP Plan Premium- 1lakh/year.

Tenure-15 years

Sum Assured Insurance amount- 10 Lakh (10 times of premium)

Started in Feb 2014.

 

So, it has been 7 years since I bought this ULIP and now I want to surrender it as the lock-in period of 5 years is over. I can surrender it and get full fund value as it has been more than 5 years

. My question is

1) How will this affect my 80C deduction (which I have already claimed) especially for the last 2 years? Will I have to pay tax on deductions claimed for the last 2 years. Or it is exempt as my ULIP plan is more than 5 years now.

 

2) What is the tax implication for surrender value? Is it fully exempt after the lockin period?

Thanks

Replies (2)
As per section 10(10D) of income tax act if the sum assured in a life insurance policy is at least 10 times the annual premium then proceeds from the policy maturity or early surrender after lock in period are tax free

Thanks for the reply!

What about the exemptions claimed in last 2 years? No implication for that as well?


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