Last FY, I had redeemed my investment in UTI Retirement Benefit Pension Scheme. The last investment made was 5 years ago and I was availing the Income Tax Exemption for the units purchased in this scheme. I had also redeemed the investment made in UTI ULIP where the last investment made was 10 years ago.
Kindly inform me whether I need to pay Long Term Capital Gains Tax on the redemption amount and if so whether what is the applicable rate
Thanks in advance
2 Answers
Hi,
UTI Retirement Benefit Pension Scheme is classified as Hybrid - Debt oriented plan.
So, any Long term capital gains on redemptions are taxed at 20% (with indexation).
UTI ULIP : Did you surrender the policy or did you receive the maturity proceeds?
Hi,
1 - I believe that you can apply INDEXATION on Dividend re-investment units (if the units are held for more than 12 months). Kindly note that it can be a very tough task to calculate manually. You may ask your platform provider (if any) for Capital gain statement or (if not) take help of a CA.
2 - On sale of bonus units of debt‐oriented mutual fund after a period of 36 months, the gain, if any, will be treated as long‐term capital gains and the same is taxable @ 20% (with indexation) + surcharge/cess as may be applicable.
3 - If there are proceeds received from the ULIP in case of maturity of the insurance policy then this will be classified as a payout from the insurance policy under Section 10 (10D) and the entire amount here will also be tax free in the hands of the receiver.
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