CLARITY ON ULIP TAXATION

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 CLARITY ON ULIP TAXATION


 ULIPs had been brought under the tax ambit a few years ago. Under section 10(10D) gains from ULIPs on annual premiums up to ₹2.5 lakh are tax free, subject to certain conditions. 

 However, when premiums exceeded ₹2.5 lakh, the gains were added to the income of the investor and taxed at the marginal slab applicable. However, the Budget has stated gains on ULIPs with annual premiums exceeding ₹2.5 lakh would be taxed at 12.5 per cent, provided the holding period is more than one year. Thus, there is substantial relief for ULIP investors. This move also brings taxation of ULIPs on par with other market-linked financial products.

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