My father had bought SBI's Smart ULIP on 22 Dec 2009 and has paid 5 premiums so far. The lock-in period is over now. Please tell me about tax treatment if we withdraw from it.
- Shishir Jain
The surrender value will be tax-free as you have completed five years with the ULIP. There will be no surrender charge levied by the insurer either. The surrender value of ULIP is added to your income and taxed as per your slab rate, if you surrender it within five policy years.