Tax implications on surrender of Unit linked Pension Plan

Tax queries 360 views 4 replies

NPS

5 Points Joined December 2021

Hello,

I had purchased a Unit Linked Pension Plan with ICICI prudential in Feb 2003. The premium is Rs 10,000 per annum. This ULPP was surrendered in Dec 2021 and surrender value received was Rs 5.51 lakhs. The maturity was in Feb 2033 but the plan was surrendered early in Dec 2021. The total premium paid from inception in Feb 2003 to surrender in Dec 2021 was about Rs 1.89 lakhs and units were from ICICI Pruentual Pension Balanced fund. Since this is Unit Linked Pension Plan, there is no insurance component in this plan. Pls do let me know the tax implications due to surrender of this ULPP in Dec 2021.

Thank you in advance,

Regards,

NPS.

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208750 Points Joined July 2016

Need to go through the policy document.

Also depends upon TDS deducted if any.

NPS

5 Points Joined December 2021

Dear Dhirajlal Rambhia

Thank you for the feedback. I have checked and there is no such surrender tax related details mentioned in the policy document. Also there has "not" been any TDS deducted by ICIC Prudential .

Regards,
NPS

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208750 Points Joined July 2016

Actually, from policy terms, I wanted to check if sec, 10(10D) of IT act was applicable.

If yes, there will not be any tax liability.

NPS

5 Points Joined December 2021

Dear Dhirajlal Rambhia

Thank you for the feedback. I rechecked the policy document and it has only the mention of section 80 CCC(1) with respect to tax benefits for premium payment. There is "no" mention of sec, 10(10D) .

Considering that no such mention of sec 10(10D) in the policy document, as per the IT laws for Unit Linked Pension Plan - Surrender - does this come under tax ambit ? Considering that policy was bought in Feb 2003 . Also if yes then how much would be the tax to be paid ?,It will be considered as Long term capital gains or something else and how will tax computation work as premium payment is Rs 10,000 on a yearly basis ?

Thank you in advance for guiding,

Regards,

NPS