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Will surrender of ULIP be taxed?

You will not be taxed for the surrender of your ULIP plan

I surrendered my ULIP policy after 5 years, which was issued in 2011. Premium paid was 20 percent of the sum assured. Can I claim long term capital gain on the additional amount over and above the premium. No tax benefit u/s 80C was claimed.
-Sharad Mohan

For taxation, Unit Linked Insurance Policies (ULIPs) are considered as life insurance policies. Once you complete the 5 year lock in period, the surrender value of ULIPs will be tax-free under section 10 (10D). This is irrespective of the 80C tax deduction claimed for the premiums. Also, the ULIP surrender will not qualify for long term capital gain.

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