I have purchased ULIP in August 2019, ie. before the Amendment effective on February 1, 2021. If I sell the ULIP afyer the lock-in-period of 5 years (ie. before the policy maturity period of 10 years), what will be the taxation rule under the new tax regime?
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ULIP Taxation after 5 years
Replies (2)
Quick Summary
It will be tax exempt.
ULIP bought in August 2019:
• ULIPs issued before 1 February 2021 are unaffected by the Rs 2.5 lakh premium restriction. Maturity or surrender proceeds are exempt under Sec 10(10D) if the annual premium didn't exceed 10% of the sum assured.
• If you surrender after 5 years (the lock-in), the proceeds are exempt (if 10(10D) conditions are met). Surrender before 5 years reverses 80C deductions claimed.
• Partial withdrawals after 5 years are also exempt under the same conditions.
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