I have received my ULIP (Equity based) policy maturity amount (duration of policy is 10 years) this year. Sum assured is Rs 2 lakhs. But I paid a premium of Rs 50,000/- pa for 9 years. Now do I have to pay LTCG on profit? If yes, can I merge it with my total income and claim 80C deductions? Or I have to calculate tax on the profit irrespective of my Income? At present I do not have taxable income.
Please guide me
ULIPs offer tax-free maturity amount as per Section 10 (10D) of the Income Tax Act 1961. The maturity proceeds are tax-free. You can disclose the amount under ‘Exempted income’ section of your ITR (if filing your taxes).
Did you surrender the policy in the 9th year?
As you have completed five years, there will be no surrender charge and the surrender value will also be tax free. The surrender value of ULIP is otherwise added to your income and taxed as per applicable slab rate if surrendered before five policy years.
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