New Delhi: The government has not imposed a new tax on the unit-linked insurance plan (UP) but only applies last year’s budget announcement through circular, the tax department source on Monday.
Financial Law 2021 also includes provisions in income tax laws to generate revenue from the Ulips Increase in Capital, such as redemption from mutual funds.
It also delegates the power to the center to prescribe the Capital Gain calculation method, while it was notified on January 18.
Amendments have determined that if there are more than one policy, RS 2.
The 5-lakh premium limit for A year will be applied by combining the policy premium, which requires clarity, which is carried out through the circulation issued in January 19, the source of the income department.
“They only prescribe and clarify the calculation method of increasing capital as expected by the amendment carried out by the 2021 financial law,” an official said.
The 2021 financial law provided the amount received under the ulip was released on or after February, 2021 will not be released if the annual premium exceeds Rs 2.
5 lakh.
“This provision is applied to create a level-play field between mutual fund investment and ulip investment.
In terms of mutual funds, the exchange unit is charged to the capital gain tax.
However, in terms of the ulip, the redemption is excluded, even though the insurance part of the premium is much lower and part of the premium and parts The investment from the premium is high.
This amendment by the 2021 Financial Law ensures that both units and mutual funds are operating on the same footing, “a source explained.
General liberation is given to cases where the annual premium reaches Rs 2.
5 lakh in a year so that premiums are paid for life insurance parts are not affected.