Recipt of proceeds on surrender of ULIP policy

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  1. nehalchugh

    nehalchugh New Member

    Sir i bought my ULIP plan of ICICI in FY 05-06 and paid 3 premiums of Rs 25000 p.a. till F Y 07-08 . After that i did not paid premium and continued with policy till today.Que are 1.If i surrender policy today i will get 91000.Are the surrender proceeds taxable;or exempt u/s 10(10)D; of IT act. If yes What is the taxable amt. 91000 or 16000. 2.Will my surrendering of policy have an impact on 80C deductions i took from F Y 2005-06 to 07-08 of 25000 p.a. Do i have to reverse them or not and why?
     
  2. Neha Sharma

    Neha Sharma Active Member

    As per Section 80C

    "If the assessee terminates his participation in any unit-linked insurance plan by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

    then,—

    (a) no deduction shall be allowed to the assessee for the amount paid in such previous year; and

    (b) the aggregate amount of the deductions of income so allowed earlier, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the year in which amount is received"
     
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