Dear Sir, I am a retired senior citizen in the lower Income Tax slab.
The background of my querries are as follows.
1) I have taken 2 identical ULIP policies Annual premium 1,50,000 each in the year 2010, Full term 10 years, maturity in the year 2020 with ZERO SUM Assured and no medical benefit.
2) I paid total 3 Annual premium of 1,50,000 each policy. Total investment 4,50,000 each policy. Current Market Value 7,50,000 and gain 3,00,000 each.After completion of three years I stopped premium payment on advise of ULIP provider as he assured no loss to me if discontinued after 3 years. I, however, remained invested till now ie 8 1/2 years out of 10 years term.
3) I claimed max. 80CC deduction on one policy for 1,50,000 for 3 years in my IT return. No 80 CC deduction could be claimed on second policy.
4) Recently I approached the ULIP provider for full redemption of both the policies. They informed that entire Market value of ULIP will be taxable and suggested me to invest in some other schemes with low return to avoid taxation.
My Questions with respect to latest IT rules of FY 2018-19 are
1)a) Do I have to pay Any income tax on capital gains of both the polictes. If yes, then on What amount for each policy ie b) On Capital Gain or c) Full market value at redemption (For one policy 80 CC deduction availed and for the other no 80cc deduction) .will be applicable.
2) Indexing for calculation of net capital gain between year 2010 and 2018 shall be applicable or not.
3) The ULIP plan I have taken has Zero sum assured and there is no Death or Medical Benefit. So it is really not an Insurance plan Please clarify if such ULIP plans shall be considered same as normal Mutual Fund and will be taxed accordingly or it will be treated as Insurance plan.
I have read your post “Tax benefits on Life Insurance” but could not understand much. So I request you to kindly clarify my above questions in simple language so that I can understand clearly.
Thank you for kind consideration and regards
Let them show the IT Rulebook if as per them it is taxable. They are the biggest LIERS. They just need one more policy from you and to get that, they can go to any extent.
May I conclude that no Income tax to be paid if I redeem both the ULIP policies now. I shall be highly obliged if you kindly mention the IT rules 2018 which stipulates or support this. Regards
Yes…as per me no tax liability. Regarding section, please search in IT portal itself. You will find lot of tutorials.