Kotak e-Term Plan
Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.
Kotak Guaranteed Savings Plan
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.
Kotak E-Invest
Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.
Kotak Health Shield
Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.
Kotak Lifetime Income Plan
Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime!
ULIPs are a very popular type of investment. In a ULIP plan, the policyholder pays a certain amount, called a premium, from which a portion is assigned to various fund possibilities, and the advantages of the investment are realized. When purchasing ULIP, an individual does not need to acquire a separate life insurance policy because it is incorporated in the plan
With many individuals flocking to this financial investing instrument, it has carved out a niche in the investment market thanks to its dependability, extensive benefits, and capacity to generate considerable financial rewards. ULIP tax exemption is also one of the reasons they’ve become so well-known. However, certain modifications structure for the ULIP plan tax exemption may create confusion among potential and present investors.
This article will take you through all the previous and new ULIP income tax exemptions to help you understand this tool better.
On January 19, 2022, the Central Board of Direct Taxes (CBDT) released a statement outlining the mechanism for determining whether ULIPs are tax-exempt. If the yearly premium for ULIPs topped ₹2.5 lakh, the ULIP tax-exempt status would be removed, according to Budget 2021. Nevertheless, there were many questions about how the framework would operate, particularly in the situation of multiple ULIPs, which include both types purchased before and after the budget plans.
The Central Board of Direct Taxes (CBDT) stated on January 19, 2022, the process for evaluating whether ULIPs are tax-exempt. According to the current CBDT announcement, the total premium of both new and old ULIPs would be evaluated for ULIP tax exemption. If the total surpasses ₹2.5 lakh, the exemption will not apply to new ULIPs with premiums over ₹2.5 lakh.
The return or income on the maturity of ULIPs with annual premiums above ₹2.5 lakh shall be assessed as capital appreciation and levied accordingly under section 112A. However, the cap of ₹2.5 lakh on the annual premium of ULIPs would apply only to plans bought on or after February 1, 2021.
The new government taxation law will only apply to future new ULIPs as ULIP income tax exemption, so you won’t have to worry about your current ULIPs where you may continue to invest your premium until the policy matures. On the other hand, purchasing numerous policies will not assist with new ULIPs.
ULIPs remain an appealing investment choice, notwithstanding the increased tax rules. To begin with, ULIPs combine the protection of life insurance with the potential for larger investment returns. This ensures your family’s safety while also providing the best long-term returns. Furthermore, on premiums up to ₹1.5 lakhs, ULIPs continue to be tax-free. Moreover, the death benefit is still tax-free under Section 10 (10D) of the Internal Revenue Code.
Finally, unlike the intricate equity-linked market investing choices, ULIP plans are simple to grasp. As an investor, you’ll have a simple and painless time matching your fund allocation to your risk tolerance and financial objectives.
ULIPs are a popular choice among individuals, regardless of the previous and new ULIP tax exemptions. However, before you get your hands on this plan, make sure it’s compatible with your budget and personal goals.
Ref. No. KLI/22-23/E-BB/492