The Life Insurance Council, along with industry representatives, will meet members of the Central Board of Direct Taxes next week to press for standardisation of the tax structure of unit-linked polices (ULIPs) vis-à-vis pure life policies, according to Mr S.B. Mathur, Secretary-General of the Council.
At the meeting, the Council would advocate bringing ULIPS under the purview of the EEE (Exempt Exempt Exempt) method of taxation at par with the recommendations in the revised discussion paper on the Direct Taxes Code (DTC) for approved pure life products and annuity schemes, he said.
The revised paper has proposed to retain ULIPs under the EET (Exempt Exempt Tax) method, thus making the policies less tax-saving than traditional products.
Addressing media persons on the sidelines of a conference here on Wednesday, Mr Mathur said: “We will make a representation to the tax Department next week, asking for parity in tax treatment between ULIP and pure life policies. Barring the fact that the equity investment component in ULIPS is higher than in traditional policies, there is fundamentally little difference between the two products.” The council was also lobbying with the Insurance Regulatory and Development Authority (IRDA) to work out modifications in the recent norm of bundling life covers with pension plans, Mr Mathur said. The modifications demanded by the Council included making the mandate applicable to policy holders below certain age, say 15 years old, he said. There could also be an option of bundling health cover in place of life cover, he added.
