The finance minister removed the tax exemption available on maturity proceeds of high premium Unit Linked Insurance Plans (ULIPs) on the ground that “high net worth individuals are claiming exemption under this clause by investing in ULIPs with huge premiums”, and that was not the legislative intent of this clause. The tax-free status for interest accrued on high-value Employee Provident Fund (EPF) contributions was also removed on similar grounds. Hence it is strange that the exemption on maturity values of high-premium traditional insurance policies has continued.
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First Published: Sun, April 25 2021. 21:33 IST