Section 45(1B)- Capital Gain On ULIP’S
Where any person receives at any time during any previous year any amount , under a unit linked insurance premium issued on or after 01/02/2021, to which exempted u/s 10(10D) does not apply on account of
- premium payable exceeding Rs 250000/- for any of the previous year during the term of such policy or
- The aggregate amount of premium exceeding Rs 2,50,000/- in any of the previous years during the term of any such unit linked insurance premium, in a case where premium is payable by a person for more than one unit linked insurance premium issued on or after 01/02/2021.
Then any profit or gain arising from receipt of such amount by such amount by such person shall be chargeable to income tax under head capital gain and shall be deemed to be the income of the such person for the PY in which such amount was received. The income taxable shall be calculated in such manner as may be prescribed.
EXAMPLE
Mr santosh takes a unit linked insurance policy on march 20 ,2021. He wants to know whether exemption will be available under section 10(10D) at the time of maturity of unit linked . He does not have any other policy and does not intend to talk any other policy in the future.
The following information is given in table:
| Particulars | Scenario-1 | Scenario-2 |
| Sum assured | 35,00,000 | 35,00,000 |
| Annual insurance premium | 2,40,000 | 2,70,000 |
Solution
Scenario-1
At the annual insurance premium does not exceed 10% of sum assured and annual premium is not more than 250000, and the exemption u/s 10(10D) available at the time of maturity of ULIP.
Scenario-2
Annual insurance premium does not exceed 10% if any assured. Exemption cannot be denied because of operation of section 10(10D). However, annual insurance premium exceeded 250000. Consequently,. by virtue of fourth and fifth provision to section 10(10D), X cannot claim exemption. Capital gain will be taxable under section 45(1B) and tax will computed within the parameters of section 112A.
