I have paid an yearly premium of ₹10,000 for the last 10 years for ICICI Pru Life Time Pension II. It is maturing on 15 February 2016. Will it be taxed? What could be better choice as today? I do not need the money now? I am ready to reinvest.
- Shankar
Your policy is maturing in a month. It allows you to take out one-third of the accumulated corpus on maturity. This is tax-free income for you. You have to use the rest of the corpus to buy an annuity. The annuity income would be added to your regular income and taxed as per the Income Tax slab applicable to you.
It is not possible to suggest an investment option to you since you have not stated your investment horizon. Here are some pointers. If your investment horizon is below five years, park the money in a safer avenue like bank deposit and debt mutual funds. If you have an investment horizon of more than five years, you can consider investing the money in an equity mutual fund. You can park the money in your bank account and do a Systematic Investment Plan (SIP) or park the money in a liquid scheme and do a Systematic Transfer Plan (STP) in the equity scheme.
If you are a first-time investor to the stock market, you can consider investing in a top-rated balanced scheme.
If you are not a new comer to the market, you can consider investing in a top-rated diversified equity mutual fund scheme.
This article was originally published on January 15, 2016.
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