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Tax implications of surrendering the policy

ICICI Prudential Life Stage Pension Policy is a Unit Linked Pension Plan

I am 60 years old and I have invested ICICI Prudential Life Stage Penison in May, 2009. I have been paying instalments until last year, and the present value is ₹4.40 lakh. I have not claimed any tax deductions on the premium paid. I have been claiming deductions only on my PPF contributions of ₹1.5 lakh under 80C. If I surrender the policy, what will be the tax implications? What will be the surrender value? Is service charge applicable on -surrender charges, as ICICI Pru team claims?
- Anjaneyasastry Vemuri

ICICI Prudential Life Stage Pension Policy is a Unit Linked Pension Plan. Since you have paid premiums for seven years, you will get the fund value minus all applicable charges and a surrender charge (1 per cent). You should check with the insurance company to find out the exact surrender value for your policy. There will be no reversal of 80C tax deductions applicable in your case. The surrender value you get from this policy will be added to your income in the year of receipt and taxed as per the applicable income tax slab. There will be a service charge applicable on surrender, which is generally 2 per cent on the fund value and there is a clause that if the PAN card is not updated, then 20% service charge is applicable.

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