A unit-linked insurance plan, or ULIP, is one of the many financial products available in the investment market. ULIP investments are one of the most popular investment options because it offers the twin benefits of life insurance and long-term wealth creation. To help investors save more than they invest and get back a percentage of the premiums paid, the government offers many ULIP tax benefits through ULIP insurance plans under the applicable provisions of the Income Tax* Act, 1961.
Both salaried and non-salaried individuals, Hindu undivided families (HUFs), associations, companies, trusts, and other bodies that qualify as a person under the Companies Act and the Income Tax* Act can claim these ULIP tax exemptions. Let’s deep dive into the ULIP plans tax benefits you can avail of with a ULIP plan.
ULIPs are primarily meant for generating income for the long term through compounding and saving. They are also meant to give life insurance coverage to the family members of the investor. The ULIP taxation benefits are the third or tertiary aspect of a ULIP plan. However, through sections 80C, 10(10D), and other provisions, you can claim a ULIP tax exemption.
Here are some of the other ULIP benefits:
As mentioned above, ULIPs are the perfect investment tool for making goal-oriented savings, creating a financial reserve for the long run, and securing your family with life insurance along the way. The tax*-saving aspect of ULIPs is an added benefit of buying a ULIP plan and should not be the only reason you purchase it.
L&C/Advt/2022/Jul/1729