Both the Investments are covered under Section 80(C) of Income Tax Act. Hence, in both the cases, Investments upo 1lac are tax free. But what about the maturity amount? ULIP maturity amount is covered under Section 10(10)(D) and hence tax free. Is it same in case of ELSS or any other Mutual Fund?
RE:Tax implication
by Jinesh Sawlani on Feb 28, 2008 11:14 AM Permalink
i guess ULIP on maturity is tax free as there is inusrance part in it and not sure abt ELSS or MF i guess on maturity they are not tax free.
Instead of ULIP if you split the cover under direct term policy and invest balance in under SIP thro MF what would be the difference in return over a normal ULIP plan. Can someone explain the numbers?
Deductions to the tune of 30% in ULIPS means you start about 2 years behind vis-a-vis ELSS making ULIP unattractive to start with. Dont know why IRDA which is there to safeguard investors interest allows it.
RE:Ulips Vs ELSS
by Lakshminarayanan V on Feb 15, 2007 07:35 AM Permalink
It is not that way, Mr. ATUL - Please understand that ULIPs are destined to be long term Investments - so over a period of time, the initial loading fees gets negated & averages out to be around 4-5% every year, which is nominal. The high fromt end charges on ULIPs is to make sure people don't with draw the amount after 3 years lock-in period gets over & to promote long term savings.
From the above artice it is more unclear abt the comparision betwenn ELSS and ULIP. Dont the high intial charges eat up ur returs in long term. take a term policy for insurance and invest in ELSS for tax saving then i think the returns will be much higher than ULIPs. Any comments? pls
RE:ELSS vs ULIP ??
by Kapil Tyagi on Feb 12, 2007 12:14 PM Permalink
To compansate the high initial charges one might go for a policy where initial charges are less, becoz the intial charges varies from company to company. Some insurance companies will charge upto 50% of first year premium while some charges only 5%. So always explore all your options before investing in ULIPs and don't go by what the agents have to offer.
RE:ELSS vs ULIP ??
by sachin medhi on Feb 12, 2007 11:57 AM Permalink
i agree, nothing comes in this world for free. If you invest in ULIPs, insurance companies will eat the bigger part of cake and give you a small piece of the overall money after your insured period. So here you are paying with MONEY. If you go for plain term insurance and ELSS or any other mutual funds for growing your money you will have to spend more time every year to keep up your expecattaion about the growth. Here you are paying with your TIME and EFFORTS. Choice is yours. I prefer the second options as it gives me lot of FLEXIBILITY
RE:RE:ELSS vs ULIP ??
by SDVS JAGANNADHA RAJU on Feb 12, 2007 12:05 PM Permalink
I think even in ulips u have to spend time in using switches to increase ur returns? i think u waste time in both the cases.So on the face of it i think ulips are wasting ur money along with ur time. isnt it? i want ur comments
