I bought BSL Empower Pension Plan, a Unit Linked non-participating pension plan, with accumulation term of 10 years in December 2013. I paid an annual premium of ₹2.5 lakh for three years. I wish to surrender my policy after five years. I want to know whether my surrender value will attract service tax / TDS or any other taxes?
- P. S. Mitra
Birla Sun Life Empower Pension Plan is a Unit Linked Pension Plan (ULPP). You can surrender the plan after five years. The surrender value would be the fund value at the time of surrendering the policy. The surrender value would be taxed as per the income tax slab applicable to the policyholder.
In future, do not buy insurance products for investment. It is always better to buy a pure term plan to get an adequate insurance cover to take care of your financial dependents. You can buy a very large cover with a low premium in a pure term insurance plan. You should opt for pure investment product like an equity mutual fund schemes to achieve your long-term financial needs.
This article was originally published on May 03, 2016.
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