For life insurance policies issued on or after 1 April 2023, the tax exemption on maturity benefits under Section 10(10D) will only be applicable if the aggregate premium paid by an individual is up to Rs.5 lakh.
Currently, the maturity proceeds for all types of life insurance policies, which include death benefits, maturity benefits and accrued bonus, are tax-free if the premium does not exceed 10% of the sum assured for policies issued after 1 April 2012, and does not exceed 20% of the sum assured for policies issued between 1 April 2003 and 31 March 2012.
This new exemption is not applicable to unit-linked insurance plans (Ulips). This will not affect the tax exemption provided to the amount received on the death of person insured, and will also not affect the insurance policies issued till 31 March 2023.