Tax implications on ULIP surrender

Hi,

I had taken Aviva ULIP in 2007 with a premium Rs. 75000 per annum. I paid 5 premium so far.

Current surrender value is 322000(Around 50k loss). 

Do I have to pay tax for this money if I surrender the policy now? and how much is the tax?

Ramprasad

4 CommentsAdd Comment

  1. Ela Selvaraj

    Dear Ashal,

    I am in need of some clarification here. I am an NRI, Invested in ICICI Prudential ULIPS. The premium amount is 3.0 lakhs per year for next 5 years. The sum assured is 10 times the annual premium which 30 lakhs. I am not planning to withdraw until its mature in 10 years time. After maturity (in my case 10 year policy term), whether the maturity amount is taxable? I read it all over the forum and I understand that the maturity amount is tax-free whatever the NAV value is. But to be sure I emailed the ICICI Prudential to know the details, the reply was shocking…

    “Dear Sir,

    We hereby inform you that as per new tax laws, if the customer is Non Resident of India (NRI) the income tax applicable on his Income which is mentioned below :

    If Net Income = 1 crore, then the applicable rate is 33.99%.”

    I am surprised from the above reply and worried of huge tax payment on my returns. Please from your side, clarify the above query.

    Thanks
    Ela

  2. Ramprasad

    HI Ahsal,
    Thanks, Sum assured was 7.5 lakhs and premimum years were 20.
    So if I surrender, it is not taxable? then when is it taxable?

    Ramprasad

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