Life insurance is a financial contract between an individual and an insurance company. The policyholder agrees to pay a specified premium at regular intervals, and in return, the insurer promises to pay a predetermined sum to the nominee in the event of the policyholder’s death. This ensures financial stability for the family or dependents of the insured. Life insurance serves a dual purpose. It not only offers death coverage but also functions as a savings or investment instrument. It supports financial planning, wealth accumulation, and income protection. In some cases, it provides a lump sum payout upon maturity, even if the insured survives the policy term.
Term Life Insurance
Term life insurance is the most straightforward form of life insurance. It offers coverage for a specific term or duration, such as 10, 20, or 30 years. The policy pays a death benefit to the nominee if the insured dies during the policy term. However, no benefits are paid if the policyholder survives the term. Since it does not have any savings or investment component, term insurance is typically more affordable compared to other types. It is suitable for individuals looking for high coverage at low premiums to protect their family in case of untimely death. These policies do not offer maturity benefits and serve purely as risk cover.
Endowment Policy
An endowment policy provides both insurance and savings benefits. If the insured survives the policy term, a lump sum amount, also known as the maturity benefit, is paid to them. If the policyholder dies during the policy period, the nominee receives the sum assured plus applicable bonuses. Endowment policies are best suited for individuals looking for disciplined savings, a guaranteed return on investment, and life coverage. These policies usually carry higher premiums due to the savings element and are considered less risky compared to investment-linked policies. They are ideal for long-term goals such as children’s education, marriage, or retirement planning.
Unit Linked Insurance Plan
A unit-linked insurance plan combines life insurance coverage with market-linked investment. The premium paid is partly used for providing life cover, and the remaining is invested in a variety of investment options such as equity funds, debt funds, or hybrid funds, depending on the policyholder’s risk appetite. The performance of the policy depends on market movements, which makes it a risky proposition compared to traditional life insurance plans. However, ULIPs offer flexibility in switching between funds and customizing the portfolio based on financial goals. ULIPs are suitable for investors who are willing to take calculated risks in exchange for potentially higher returns.
Exemption Under Section 10(10D)
Section 10(10D) of the Income Tax Act provides tax exemption for any sum received under a life insurance policy, including any bonuses. This exemption is available for maturity proceeds, death benefits, and surrender value, subject to certain conditions. The exemption under this section applies irrespective of whether the payout is made in a lump sum or installments. However, over time, concerns have been raised about misuse of this exemption by high-net-worth individuals. They purchase policies with high premiums solely to avail tax-free maturity benefits. To prevent such practices, the government has imposed limits on the premium paid to qualify for the exemption.
Premium-Based Exemption Restrictions
The Finance Act, 200,3, was the first to introduce restrictions on premium-based exemptions under Section 10(10D). It stipulated that if the annual premium payable in any year during the policy term exceeded 20 percent of the actual capital sum assured, the exemption under Section 10(10D) would not be available. In such cases, the maturity amount or any other sum received would be taxable in the hands of the recipient. This limit was further tightened in the Finance Act, 2012. The revised threshold was fixed at 10 percent for policies issued on or after April 1, 2012. This means that for these policies, the annual premium should not exceed 10 percent of the actual capital sum assured in any policy year for the exemption to be available.
Special Provisions for ULIPs
With the growing popularity of ULIPs among wealthy investors, the Finance Act, 202,1, introduced additional restrictions to prevent misuse. It capped the premium payable for ULIPs at two lakh fifty thousand rupees per annum. If the premium paid exceeds this limit in any year during the term of the policy, the exemption under Section 10(10D) would not apply. This threshold applies only to ULIPs issued on or after February 1, 2021. Furthermore, ULIPs not qualifying for exemption are treated as capital assets, and any income received from them is taxable under the head capital gains. This provision brought clarity to the tax treatment of non-exempt ULIPs, aligning them with equity mutual funds in terms of taxability.
Proposed Amendment in Budget 2023
In the Union Budget 2023, the government proposed a new monetary limit for life insurance policies other than ULIPs. The intention was to further curb tax-free maturity benefits for high-premium policies. The amendment introduced a new proviso in Section 10(10D), applicable to policies issued on or after April 1, 2023. As per the proposed amendment, if the premium payable for any year during the term of a life insurance policy (excluding ULIPs) exceeds five lakh rupees, then the maturity amount received from such a policy will not be exempt under Section 10(10D). The only exception to this rule is when the payout is on account of the death of the policyholder.
Applicability to Multiple Policies
The proposed amendment also addressed situations where an individual holds multiple life insurance policies. In such cases, the exemption under Section 10(10D) would be available only for those policies where the aggregate premium in any policy year does not exceed five lakh rupees. If the total premium paid for all policies taken after April 1, 0,3 exceeds this threshold in any year, the exemption will be denied for the high-premium policies. However, the policies whose individual and aggregate premiums remain within the five lakh limit can still enjoy the exemption. This amendment ensures that the tax benefit is limited to small and mid-sized policies and not exploited for tax planning by investing large amounts in high-value policies.
Income Tax Head for Non-Exempt Policies
Another significant change proposed in the Budget 2023 was the tax classification of income received from life insurance policies that do not qualify for exemption under Section 10(10D). The amendment added a new clause to Section 2(24), explicitly including such sums as income. This resolves the previous ambiguity on whether they should be treated as capital receipts or income from other sources. Simultaneously, Section 56(2) of the Income Tax Act was amended to state that maturity proceeds from non-exempt life insurance policies will be taxed under the head income from other sources. Thus, if a policy does not meet the exemption criteria, the maturity proceeds, including bonuses, will be fully taxable under this head.
Computation of Taxable Income
To compute taxable income from life insurance policies not qualifying under Section 10(10D), only the net amount received is taxable. The aggregate premiums paid over the term of the policy will be deducted from the total sum received to arrive at the taxable portion. However, if any premium was claimed as a deduction under any other provision of the Income Tax Act, such as Section 80C, then that portion of the premium will not be allowed to be deducted again under Section 56. This ensures that there is no double benefit for the same premium payment and maintains the integrity of the tax calculation.
Illustration for Single Policy
Consider the case of four individuals who purchased life insurance policies around the date of the amendment. Person A purchased a policy before April 1, 2023, with a premium of three lakh forty thousand and a sum assured of fifty lakh. Since the policy was issued before the cut-off date and the premium does not exceed 10 percent of the sum assured, the exemption under Section 10(10D) is available. Person B purchased a policy after April 1, 2023, with a premium of four lakh and a sum assured of forty-five lakh. Since the premium does not exceed either five lakh rupees or 10 percent of the sum assured, the exemption is available. Person C and Person D, however, paid annual premiums of six lakh thirty thousand and eight lakh respectively, which exceed both the 10 percent cap and the five lakh rupee threshold. Therefore, they are not eligible for exemption under Section 10(10D).
Illustration for Multiple Policies
Now consider a scenario where an individual holds multiple policies issued after April 1, 2023. If they hold eight different policies with varying premiums and sum assured, only those policies whose aggregate premium in any year is less than or equal to five lakh rupees will qualify for exemption. Suppose Policies A, B, C, and D have premiums exceeding five lakh rupees or do not meet the 10 percent threshold. In such cases, they are disqualified. Policies E, F, G, and H have premiums that are individually and collectively under the five lakh limit. These policies may still enjoy tax exemption under Section 10(10D). However, the taxpayer must carefully allocate the five lakh exemption limit to policies that generate the highest returns to minimize taxable income.
Impact on Financial Planning
These amendments significantly affect financial planning and the attractiveness of life insurance as a tax-free investment tool. Individuals who previously used life insurance primarily as a tax shelter must now reconsider their strategy. With new monetary limits in place, only policies with moderate premiums will continue to offer tax-exempt benefits. High-value policies may still be pursued for insurance protection, but the maturity proceeds will be subject to taxation, reducing the overall return. Financial advisors must now guide clients more carefully in choosing between term insurance, endowment policies, and ULIPs, depending on their financial goals and tax considerations.
Analysis of Taxability Under Sections 2 and 56
The amendments introduced in the Finance Bill, 2023, sought to resolve the long-standing uncertainty regarding the classification and tax treatment of life insurance maturity proceeds not exempt under Section 10(10D). Before this amendment, taxpayers often argued that the sums received from non-exempt life insurance policies should not be taxed since these were capital receipts not falling under the definition of income. Some believed it might qualify as capital gains, while others claimed that in the absence of explicit inclusion under Section 2(24), such amounts were outside the purview of tax.
By amending Section 2(24), the government expanded the scope of income to include proceeds from life insurance policies that do not satisfy the conditions of exemption under Section 10(10D). The new sub-clause (xviid) in Section 2(24) now covers such amounts explicitly. This change leaves no room for ambiguity and confirms the intention to treat such proceeds as taxable income.
In line with this, Section 56(2)(xiii) has been inserted to provide that the sum received under life insurance policies (excluding ULIPs and Keyman policies), which is not exempt under Section 10(10D), shall be taxed under the head income from other sources. This ensures uniformity and avoids unnecessary litigation on the matter of the head of income under which the sum should be taxed.
Method for Computation of Taxable Income Under Section 56
When a life insurance policy does not qualify for exemption under Section 10(10D), the income chargeable under Section 56(2)(xiii) is calculated by deducting the aggregate amount of premium paid during the term of the policy from the total sum received. However, there are certain adjustments to consider. If the taxpayer has claimed deductions under any other provision of the Income Tax Act for the premium paid, such as Section 80C, the amount of such deduction is to be excluded from the deductible portion. This ensures that the taxpayer does not get double benefit, once as a deduction under Chapter VI-A and again as a reduction from taxable income.
The Central Board of Direct Taxes may also prescribe detailed rules to ensure a uniform method of computing taxable income from life insurance policies. For now, the structure provided by the Finance Bill is sufficient to understand how such income will be calculated.
For example, suppose an individual has received a sum of seventy lakh rupees on maturity of a policy and has paid total premiums of sixty lakh rupees over the policy term. If ten lakh rupees of the premium were claimed as deductions under Section 80C, then only fifty lakh rupees will be deductible under Section 56. Hence, the taxable income will be twenty lakh rupees.
Illustration for Better Understanding
Consider the following example. Mr A has taken a life insurance policy on April 30, 2023, for a term of ten years. He pays a premium of three lakh forty thousand annually,y, and the sum assured is fifty lakh rupees. Since the premium does not exceed either ten percent of the sum assured or the five lakh annual threshold, the policy qualifies for exemption under Section 10(10D). Therefore, no tax is applicable on maturity proceeds.
Now consider Mr C, who also purchased a life insurance policy on May 21, 2023, with a premium of six lakh thirty thousand annually and a sum assured of seventy lakh rupees. Since the premium exceeds five lakh rupees and the policy was issued after April 1, 2023, the exemption under Section 10(10D) does not apply. Suppose he receives eighty-seven lakh rupees on maturity and has paid premiums totaling sixty-three lakh rupees during the policy term. He had claimed deductions of fifteen lakh rupees under Section 80C during this period. Hence, only forty-eight lakh rupees are deductible under Section 56, and the taxable income becomes thirty-nine lakh rupees.
Claiming Deductions and Its Effect on Taxable Income
One important consideration for policyholders is the impact of deductions claimed under Section 80C. While this section allows deductions for premiums paid on life insurance policies, the amount eligible for deduction is limited to ten percent of the actual capital sum assured. Any premium over this percentage is not eligible for deduction. Moreover, when computing the taxable income under Section 56, the portion already claimed as a deduction must be excluded from the deductible aggregate.
For instance, if an individual pays a premium of three lakh rupees per annum on a policy with a sum assured of twenty lakh rupees, only two lakh rupees qualify for deduction under Section 80C. When maturity proceeds are received, and if the policy is not exempt under Section 10(10D), only the portion of the premium not claimed under Section 80C is deductible from the sum received to arrive at the taxable amount. This integration of multiple sections ensures consistency and avoids misuse of the tax benefit.
Examples Illustrating Deduction and Taxability
Let us consider a detailed example. Four individuals, Persons A, B, C, and D, each invest in different life insurance policies with different premium structures and terms. They all purchase policies after April 1, 2023, and each policy has a tenure of ten years. Person A pays three lakh forty thousand annually with a sum assured of fifty lakh rupees. Since this is within both the ten percent and five lakh thresholds, he qualifies for full exemption under Section 10(10D). The total premium paid is thirty-four lakh rupees. The deduction claimed under Section 80C is fifteen lakh rupees. Thus, when computing income under Section 56, if the policy were not exempt, only nineteen lakh rupees would be deductible. The taxable amount, had the policy been ineligible for exemption, would have been forty-six lakh rupees assuming a maturity value of sixty-five lakh rupees.
Person C, on the other hand, pays six lakh thirty thousand per annum and has a sum assured of seventy lakh rupees. His total premium over ten years is sixty-three lakh rupees. Assuming the same deduction of fifteen lakh rupees under Section 80C, only forty-eight lakh rupees are deductible. If the maturity proceeds are eighty-seven lakh rupees, the taxable income under Section 56 would be thirty-nine lakh rupees. This example clearly shows the interplay between Section 10(10D), Section 80C, and Section 56, and how prior deductions reduce the deductible component from maturity proceeds, increasing the taxable income.
Death Benefit Remains Exempt
Despite all these changes and conditions, one constant feature retained in the Income Tax Act is the exemption on sums received upon the death of the policyholder. Irrespective of the premium paid or the type of policy, any amount received by a nominee or legal heir due to the death of the insured is fully exempt under Section 10(10D). This exemption applies even to policies that would otherwise not qualify for tax benefits due to exceeding the premium thresholds.
This provision maintains the fundamental purpose of life insurance, which is to provide financial security to dependents upon the policyholder’s death. It ensures that families receiving death benefits are not burdened with tax liabilities during an emotionally difficult time. The law draws a clear distinction between maturity benefits and death benefits and exempts the latter unconditionally.
Important Points to Consider for Tax Planning
The changes brought about through various Finance Acts have important implications for tax planning. Individuals who used to invest heavily in life insurance policies as a tool for saving tax-free wealth accumulation now need to reconsider. For new policies issued after April 1, 2023, one must ensure that the annual premium for a single policy does not exceed five lakh rupees, and in case of multiple policies, their aggregate premium must stay within the same limit to continue enjoying exemption under Section 10(10D).
If the policyholder still prefers to invest higher amounts in life insurance, they must be prepared for the maturity amount to be taxed under Section 56. In such cases, planning the premium structure and evaluating the expected returns against the tax liability becomes essential. Moreover, taxpayers should also be mindful of the deductions claimed under Section 80C to avoid overestimating the deductible portion when calculating taxable income under Section 56.
Tax Rates Applicable on Taxable Life Insurance Proceeds
The income taxed under Section 56, arising from life insurance policies not exempt under Section 10(10D), is subject to normal slab rates applicable to the individual or taxpayer category. There is no special rate of tax applicable, and the income is added to the gross total income of the assessee. Therefore, if an individual falls in the thirty percent tax bracket, the entire taxable portion of the life insurance proceeds will be taxed at that rate.
However, in the case of ULIPs where exemption is denied due to premium exceeding the cap of two lakh fifty thousand rupees per annum, the tax treatment differs. ULIPs are treated as capital assets, and the gains are taxable under the head capital gains. If the ULIP is equity-oriented and held for more than one year, the long-term capital gains are taxed at ten percent beyond the threshold of one lakh rupees. Short-term gains on such units are taxed at fifteen percent. For other non-equity-oriented ULIPs, long-term capital gains are taxed at twenty percent with indexation benefits, while short-term gains are added to total income and taxed as per slab rates.
Challenges in Implementation
Though the provisions seem straightforward, there could be practical challenges in implementation. Tracking the cumulative premium paid across multiple policies and ensuring compliance with the five lakh rupee threshold requires diligent record-keeping. In case of any miscalculation or misreporting, the taxpayer could end up claiming an exemption incorrectly or paying additional tax, interest, and penalty later. Insurance companies also have a role to play in issuing certificates that clearly show the total premium paid each year and whether the policy qualifies for exemption or not.
The introduction of detailed reporting standards and the role of digital platforms in verifying premium payment details could help in ensuring smoother implementation of these provisions. Over time, with greater awareness and better tools, taxpayers and tax administrators are likely to adapt to the new requirements.
Strategic Investment Decisions Post Amendment
In the wake of the new provisions, strategic financial decisions must be made with a tax-conscious approach. High-net-worth individuals seeking to park surplus funds in tax-free instruments might now look towards alternatives such as Public Provident Fund, National Savings Certificates, or even tax-free bonds. Life insurance policies, especially traditional endowment or high-premium policies, may now lose some of their appeal as investment products and may be chosen more for the life cover they provide than for tax planning.
Investors must now assess the net return after taxes and compare it with other instruments offering similar security with better tax outcomes. Moreover, financial planners will need to review client portfolios to ensure they are optimized for both insurance needs and tax efficiency under the new regime.
Impact of Budget 2023 on Section 10(10D)
The Finance Act 2023 introduced significant changes to the taxation of life insurance policies under Section 10(10D), especially concerning high-value policies. These changes aim to bring parity in tax treatment between life insurance policies and other investment instruments. According to the revised provisions, any sum received under a life insurance policy issued on or after 1 April 2023 (except ULIPs)will not be exempt if the total premium payable in any year during the policy term exceeds ₹5 lakhs. However, if the sum is received on the death of the insured person, the exemption under Section 10(10D) continues to apply, irrespective of the premium amount. The amendment intends to curb the misuse of life insurance policies as tax-free investment instruments by high-net-worth individuals. Before this, such policies were being used to earn tax-exempt income, even when the investment aspect far outweighed the protection aspect. The new rules make the exemption more aligned with the actual purpose of life insurance: risk coverage. Moreover, if a taxpayer holds multiple policies issued on or after 1 April 2023, the exemption shall apply only to those where the aggregate premium does not exceed ₹5 lakhs in any year. This limitation ensures that the benefit is not multiplied across several high-premium policies. This change does not impact policies issued before 1 April 2023. Hence, older policies continue to enjoy full exemption under Section 10(10D), provided they meet the earlier conditions. For Unit Linked Insurance Plans (ULIPs), this amendment is in line with the change introduced by the Finance Act 2021, which disallowed exemption under Section 10(10D) if the premium payable for any year exceeds ₹2.5 lakhs. Thus, there are now different exemption thresholds depending on the type and issue date of the policy. Overall, the post-Budget 2023 changes underline the government’s intent to discourage the use of insurance as a tax-free investment tool and restore its primary role as a risk cover.
Tax Deducted at Source (TDS) on Life Insurance Proceeds
While Section 10(10D) provides exemptions for certain life insurance proceeds, cases where this exemption does not apply can lead to the application of Tax Deducted at Source (TDS). As per Section 194DA of the Income Tax Act, when any sum is paid under a life insurance policy that is not exempt under Section 10(10D), TDS becomes applicable. This provision was introduced to ensure that income received from non-exempt life insurance policies is appropriately taxed. The rate of TDS under Section 194DA was revised in the Budget 2019. Currently, 5% TDS is deducted on the income component of the payment (i.e., the maturity proceeds minus the total premium paid). This rate is applicable if the aggregate payment exceeds ₹1 lakh in a financial year. Earlier, the TDS was 1% on the gross amount paid. The change to 5% on the net income component ensures that tax is collected only on the actual income earned from the policy, making the system fairer and more rational. However, if the recipient does not furnish their PAN, the TDS may be deducted at a higher rate, as per Section 206AA. Taxpayers who fall under the exempt category need not worry about TDS, provided their policy meets all the conditions under Section 10(10D). If TDS has been deducted on an exempt policy due to any discrepancy, it can be claimed as a refund while filing the income tax return. It is also important to note that TDS is applicable only on policies where the sum is received on events other than death. Death benefits are always exempt from tax and are not subject to TDS. Taxpayers are advised to maintain all relevant documents like premium payment receipts, policy terms, and TDS certificates (Form 16A) for their records and for filing accurate returns. Misreporting of policy income could result in penalties or delays in the processing of refunds. With evolving rules, staying updated about the taxation and TDS provisions ensures compliance and better financial planning.
Taxability in Case of Surrender, Maturity, and Death
The taxability of life insurance policy proceeds depends on the event under which the payment is made—whether it is on surrender, maturity, or death. Each of these events is treated differently under the tax laws, particularly under Section 10(10D) and related provisions. In the case of surrender of a life insurance policy, the tax treatment depends on whether the surrender value is exempt or taxable under Section 10(10D). If the conditions for exemption are met—such as the policy being compliant with the 10% or 20% premium-to-sum-assured ratio or issued before or after specific dates—then the amount is tax-free. Otherwise, the income portion of the surrender value becomes taxable as “Income from Other Sources,” and TDS may be applicable. Maturity proceeds are also taxed based on similar criteria. If the policy satisfies all conditions under Section 10(10D), the maturity amount is fully exempt. However, for policies falling outside the exemption criteria—such as high premium policies issued on or after 1 April 2023—the maturity amount becomes taxable. The policyholder must then include this income in their return and pay tax as per the applicable slab rate. In the event of the death of the life insured, the entire sum received by the nominee is exempt from tax under Section 10(10D). This holds irrespective of the policy type, premium paid, or date of issuance. The rationale is to ensure that the nominee is not burdened with tax liabilities while dealing with a loss. For ULIPs, if the total premium in a year exceeds ₹2.5 lakhs (for policies issued on or after 1 February 2021), and the exemption conditions are not met, the proceeds become taxable on surrender or maturity. However, even for ULIPs, the death benefit remains fully exempt. Therefore, understanding the timing and purpose of receiving insurance proceeds is critical in determining the correct tax treatment. Taxpayers should consider the type of policy, date of issue, premium amount, and event type before evaluating taxability. Consulting a tax professional or financial advisor helps ensure accurate reporting and compliance with the law. Careful planning can also help individuals choose insurance products that meet both protection and tax-saving objectives.
Tax Deducted at Source (TDS) on Life Insurance Payments
The Finance Act, 2014, introduced Section 194DA to ensure tax compliance on life insurance policy payments. Under this provision, if the maturity proceeds of a life insurance policy are not exempt under Section 10(10D) and the aggregate amount paid exceeds ₹1,00,000, the insurance company is required to deduct TDS at the rate of 1% (now 5% on the income component as per subsequent amendments). The TDS is deducted only on the income component and not on the total amount paid. For instance, if the total proceeds are ₹3,00,000 and the total premium paid is ₹2,40,000, the income component is ₹60,000, and TDS at 5% is deducted on ₹60,000, amounting to ₹3,000.
Filing Returns and Reporting of Taxable Amounts
Taxpayers who receive life insurance maturity proceeds that do not qualify for exemption under Section 10(10D) must report this income while filing their Income Tax Return (ITR). It must be disclosed under “Income from Other Sources.” The income component—i.e., the amount received over and above the premium paid—is taxable, and the taxpayer must include it accordingly. If TDS has been deducted under Section 194DA, the taxpayer can claim credit for the TDS against their final tax liability while filing the return.
Impact of New Regime vs. Old Regime on Life Insurance Proceeds
Under both the old and new tax regimes, Section 10(10D) exemptions generally remain intact, provided the prescribed conditions are met. However, taxpayers opting for the new regime need to weigh the overall benefit of lower tax rates versus deductions available under the old regime, such as Section 80C, which includes life insurance premiums. Since the new regime does not allow common exemptions and deductions, taxpayers might lose the Section 80C benefit for premiums paid, although Section 10(10D) may still apply for proceeds.
Record Keeping and Documentation
Maintaining appropriate documentation is essential for availing of tax exemptions. Policyholders should retain records such as the original policy document, premium payment receipts, and the maturity or surrender statement issued by the insurer. In case the exemption under Section 10(10D) is challenged, these documents serve as proof of eligibility. The details must also be matched with the insurer’s report in Form 26AS or Annual Information Statement (AIS) for accurate tax filing.
Comparison of Tax Benefits Across Life Insurance Products
Different life insurance products come with varying tax implications. Traditional endowment and term insurance plans usually fall well within the eligibility conditions under Section 10(10D). In contrast, ULIPs and single-premium plans must pass specific tests—such as premium-to-sum-assured ratios and investment thresholds post the 2021 amendment. Policyholders must understand the tax treatment of their specific policy before assuming exemption status.
Importance of Reviewing Life Insurance Policies for Tax Compliance
As tax laws evolve, it becomes imperative for individuals to review their life insurance policies periodically to ensure continued tax compliance. Especially in the case of high-value policies, ULIPs, or policies taken by business entities, even small deviations from eligibility criteria may trigger tax liability. Regular consultations with tax advisors or financial planners can help mitigate such risks and ensure optimal tax planning.
Conclusion
Understanding the tax implications of life insurance policies is essential for making informed financial decisions. Section 10(10D) of the Income Tax Act provides substantial tax relief by exempting the proceeds from life insurance policies, subject to certain conditions. This exemption encourages long-term savings and ensures financial protection for policyholders and their families. However, recent amendments, especially concerning high-value premium policies and Unit Linked Insurance Plans (ULIPs), have introduced specific restrictions. Taxpayers must remain updated about these developments to avoid unexpected tax liabilities and ensure compliance.