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Taxablity of ULIP Redemption

CA Chetan Singhal (Chartered Accountant) (124 Points)

09 October 2019

I have ICICI ULIP Pension Plan, Purchased 15 Years back Eligible for Exemption under Chapter VI-A. Now I want to Withdraw my 100% Amount from the same Plan in one single installment. My question is what is the tax treatment of the Amount Withdrawn from the Pension Plan and please refer the relevant section number for the same.

Thank You

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2 Replies

Aashish Jain (12 Points)
Replied 09 October 2019

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.

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Kapadia Pravin (17264 Points)
Replied 09 October 2019

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.