The government not done away with the threshold of ₹2.5 lakh threshold for taxing unit-linked insurance policies. Returns ULIP policies, for premiums exceeding ₹2.5 lakh, will now be taxed as capital gains at a rate of 12.5% for long-term returns (held for more than a year).
Earlier, the same was being taxed as income from other sources. So, technically, it could go up to 30% depending on the applicable income tax slab.
This article will be updated with more details.(Edited by : Sriram Iyer)
