New Delhi, Feb. 10 -- The government brought unit-linked insurance plans (Ulips) under the tax net in 2021 to discourage their sale as investment-only products and to bring some parity with mutual funds, an investment product they are often pitted against.

Now, maturity proceeds from high-value Ulips are taxed as capital gains under the current rules. So, if you purchase a Ulip with an annual premium of at least Rs.2.5 lakh, the maturity proceeds are now taxed as capital gains. In other words, your gains will be taxed at 12.5% after the first Rs.1.25 lakh. For lower-ticket Ulips, the maturity proceeds will remain tax-exempt as long as the sum assured is at least 10 times the annual premium. Death proceeds-or money the nominees get-remain...