Taxablity of ULIP Redemption

Shoould be exempted under 10(10D). Thats what they use to tell while selling the policies 12-15 years back. Check the policy document about tax exemption of maturity amount. Basically such ULIPs were sold on the basic premise of EEE system of tax levy.

ULIP plan maturity ---
Tax benefit on Investment on Maturity – If the premium paid on the policy is less than 10% of the sum assured during the term of the policy the amount received on maturity are exempt from tax.

(For policies purchased before 1st April 2012, the premium must be less than 20% of the sum assured).

This exemption is allowed under section 10(10D) of the Income Tax Act. You must report this as exempt income in your income tax return.