Further, death proceeds under all the above policies shall continue to be exempt.' The remaining policies would be taxed as capital gains. In case of multiple Ulip policies purchased after 1 February 2021 and having an aggregate premium of ₹2.5 lakh or more, you have the option to choose the policies wherein the aggregate premium is less than ₹2.5 lakh to be tax-free. For policies issued before 1 April 2012, the life cover should be at least five times the annual premium.īharat Kalsi, chief financial officer of Bajaj Allianz Life Insurance, said, “In case of new Ulip policies issued on or after 1 February 2021, if the annual premium is more than ₹2.5 lakh, all gains on surrender or maturity are treated as capital gains and taxed accordingly. Taxability: For the surrender value to be tax-free, as per Section 10(10D) of the Income Tax Act, any gain on surrender/maturity of policy will be exempt in the hands of the recipient, provided the premium payable does not exceed 10% of the actual sum assured for any year during the policy term for policies issued after 1 April 2012.
