In the Unit Linked Insurance Plan (ULIP) of insurance companies, market linked returns are available with insurance cover. Presented on 23 July Union budget The changes that Finance Minister Nirmala Sitharaman has announced in the rules in tax will also affect ULIPs. In the budget, there has been a change in long -term capital gains and short term capital gence tax. The holding period of some assets has also been changed.
ULIP comes in the category of financial assets
Tax experts say that the impact of the announcement of change in tax rules in the budget ULIP Will be on the return of ULIP comes in the category of financial assets. Therefore, the new rates of Capital Gens Tax will affect ULIP returns. Vivek Jain, head of investments at Policy Bazar.com, said that ULIP policies with annual premium than Rs 2.5 lakh will continue to get tax-free maturity benefits.
Effect on ULIPs with more than 2.5 lakh annual premium
This means that the policyholders of such Ulips will continue to receive tax-free maturity benefits despite the long-term capable gains (LTCG) Tax Rejeem. The long -term capital gains of ULIP with an annual premium annual premium will now have to pay 12.5 percent tax. However, this tax will have to be paid only if the investor’s total long term capital gains more than Rs 1.25 lakh in a year.
Despite the increase in exhalation limit, more tax will be paid
After a change in LTCG rules in the budget, the policyholders of high premium ULIPs will have to pay tax on the long term capital gains in spite of increasing the exgamption limit. This will affect the total returns of ULIPs. Finance Minister Nirmala Sitaran announced several changes in the rules of Capital Gens Tax in the union budget presented earlier this week.
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Budget change in Long Term Capital Gens Rules
The Finance Minister increased the long term and short term capital gains tax. He said that short -term capital gains on special financial assets will now be 20 percent instead of 15 percent. On the other hand, long-term capital gains tax on all financial and non-financial assets has been increased from 10 percent to 12.5 percent. However, the government has increased the exgamption limit from Rs 1 lakh to Rs 1.25 lakh from the long term capital gains tax.