I have brought HDFC Unit Linked Pension Plan -2 in March 2009.I have paid premiums (₹12,000) for seven years (till March 2015). Now, if I surrender this policy, what will be the tax implication?
- Moumita Chakraborty
HDFC Unit Linked Pension II is a Unit Linked Pension Plan (ULPP) that has been discontinued by the company. Since you have completed seven years, there will be no surrender charges. However, the surrender value would be taxed as per the income tax slab applicable to you. The surrender value will be the same as the fund value at the time of surrender.
ULPPs are complicated products. Higher charges under these policies result in lower returns from them. Investing in diversified equity mutual funds via monthly systematic investment plan is the best way to save for long term goals like retirement. Always buy a pure term insurance product to secure an adequate life insurance cover.
This article was originally published on April 12, 2016.
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