Ch.8 · Dividend and STT Taxation · hard
What are the tax benefits of investing through a 'Unit Linked Insurance Plan (ULIP)' vs an equity mutual fund?
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EXPLANATION
ULIPs where annual premium is up to ₹2.5 lakh (for policies issued after February 1, 2021) receive full tax exemption on maturity proceeds under Section 10(10D). Premium paid also qualifies for Section 80C deduction. This makes ULIPs tax-efficient, but higher charges (mortality + fund management) often negate the tax advantage vs equity mutual funds for purely investment-oriented investors. For investors needing life cover, ULIPs may offer a combined solution.
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