Irda, insurers to meet CBDT on tax exemptions for Ulips
June, 22nd 2010
Insurance Regulatory and Development Authority (Irda) officials along with top insurance company executives will meet the Central Board of Direct Taxes (CBDT) on Tuesday and Wednesday over tax exemptions for unit-linked insurance policies (Ulips).
The recently revised Direct Taxes Code (DTC) proposals have classified only those insurance products for EEE (exempt-exempt-exempt) benefit where the sum assured was 20 times or above of the annual premium paid.
At present, individuals who invest in Ulips do not pay tax at any stage: at the time of investment or contribution, during the tenure of investment, or at maturity.
However, under DTC, only pure life insurance products are eligible for such a benefit.
Irda and the insurers are proposing that CBDT allow this threshold to be reduced to 10 times the premium value, which will bring most of the Ulips under the EEE net.
The insurers will also propose that the CBDT exempt death benefits in insurance policies from being taxed.