So you had an LIC endowment policy which you have surrendered and are now wondering if you have to pay any tax on the same or not.
Or, you have a pension plan from ICICI Pru, HDFC Life and others which was not making money for you. You were naive then to buy into it but not any more. Better to put it in a more rewarding investment.
But do you know, what is your tax liability on the same?
I am increasingly convinced that insurance (specially the investment variety) is a super complex product. There are so many ifs and buts attached to the product. It could have been otherwise so simple to understand and buy.
With the current product structure, it is just not possible for a layperson to understand and evaluate the product and make an informed decision. And on top of it, there are tax laws.
Well, I guess there is no point complaining. We will have to learn to navigate through the jungle.
Recently, I received the following query from a reader. It is about surrender value taxation of a life insurance policy.