New earnings tax rule: Proceeds from life insurance coverage premium over the annual premium of ₹5 lakh can be taxable from new monetary yr i.e. from 1st April 2023. The Finance Minister Nirmala Sitharaman made an announcement about this transformation in earnings tax guidelines whereas presenting the Union Budget 2023 in parliament. However, the finance minister made it clear that the brand new earnings tax rule will maintain demise profit on such premium would proceed to stay tax exempted. She additionally introduced that the brand new earnings tax rule will not be relevant on ULIP (Unit Linked Insurance Plan).
“It is proposed to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above ` 5 lakh, income from only those policies with aggregate premium up to ` 5 lakh shall be exempt. This will not affect the tax exemption provided to the amount received on the death of person insured. It will also not affect insurance policies issued till 31st March, 2023,” Nirmala Sitharaman stated whereas delivering her funds speech on the ground of the parliament.
Decoding the result of this announcement, Pankaj Mathpal, MD & CEO at optima Money Managers stated, “In the previous budget, it was announced that benefit on ULIP premium of over ₹2.50 lakh in single financial year would be taxable. But, other life insurance products were left untouched. In this budget, the Finance Minister Nirmala Sitharaman has now covered other life insurance products by levying income tax on the insurance benefit coming on the annual premium above ₹5 lakh limit. However, ULIP limit of ₹2.5 lakh per annum has been left untouched.”
So, as soon as this funds proposal on life insurance coverage change into relevant (from 1st April 2023), LIP advantages on an annual premium as much as ₹2.5 lakh will probably be tax exempted whereas life insurance coverage profit on as much as ₹5 lakh each year premium will stay tax exempted.
Speaking on this new funds proposal introduced by FM Sitharaman, SEBI registered tax and funding professional stated, “Those who are investing in life insurance plans can now avail tax exemption on the insurance proceeds on up to ₹7.50 lakh annual premium if they pay ₹2.5 lakh for ULIPs and ₹5 lakh for other than ULIP life insurance plans.”
Catch all of the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.
More
Less
Topics
