The government has so far not imposed any tax on investments made in ULIPs. But in the coming days these will also have to pay tax. Finance Minister Nirmala Sitharaman has decided to impose a tax on these.
Generally the government exempts certain types of investments from tax. Unit Linked Insurance Plan-ULIP is one of them. The government has so far not imposed any tax on investments made in ULIPs. But in the coming days these will also have to pay tax. Finance Minister Nirmala Sitharaman has decided to impose a tax on these. So far, the ULIPs have been exempted in three stages. That is, when making an investment, the income from the investment, the total income available under the scheme .. There was a tax deduction in all three stages. As a result, these investments are not subject to income tax. The Finance Minister has proposed some changes in the latest budget regarding these exemptions.
What kind of tax is there?
Those who have taken one or more ULIP plans .. If the annual premium paid in a financial year does not exceed Rs. 2,50,000, the tax deduction will be applicable as usual. Those who opt for ULIPs after the budget have to pay capital gains tax. If capital gains such as an equity oriented mutual fund exceeds Rs 1 lakh, a capital gains tax of ten per cent is levied on it. A security transaction tax also applies to ULIPs taken after February 1. This tax is payable on sale, surrender or redemption of an equity oriented fund to an insurance company.
The old can continue
There will be no tax on income after maturity of ULIPs taken before budget. If the person who took the ULIP dies while the policy is in force .. no tax will be levied on the amount given to the nominee. But experts say those who invest in old plans after the budget will be taxed under the new rules. Details on how to calculate capital gains are not yet officially disclosed. Those who have taken ULIPs before the budget can continue them without any fear. The details of how the tax will be levied on ULIPs are likely to be fully known only after the government releases an official notification on the new tax policies and tax liability.
The new rules are just for them
Experts suggest that those who choose ULIPs for tax saving should be fully aware of these rules. There is no need to reduce the premium you are currently paying for fear of tax. The new rules are likely to reduce the amount received after the deadline. It seems that the new rules are aimed at those who choose ULIPs only to avoid paying taxes.
