ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -(As per the rules, where multiple ULIP proceeds are received during the year, the consideration under only such eligible ULIPs shall be exempt from tax under Section 10(10D), where aggregate of the amount of the premium payable does not exceed Rs 2.5 lakh for any of the financial years during their term).

Detailed explanation-2: -The total monetary worth of the units owned by the policyholder is termed as fund value. You can calculate the fund value on a particular day by multiplying the net asset value (NAV) of each unit on that particular day by the number of units held.

Detailed explanation-3: -The NAV of a ULIP plan can be calculated by adding up the total ULIP funds on a date and then deducting expenses like operating and management charges from it. The net value is divided by the total number of units to get the NAV.

Detailed explanation-4: -Earlier any gains made on ULIPs were completely tax free, however, after the Budget 2021 proposal the maturity amount remains tax free only if the aggregate annual premium is up to Rs 2.5 lakh a year. If the annual premium goes above Rs 2.5 lakh then one has to pay capital gains tax on any income earned on it.