Exempt-Exempt-Exempt (EEE), Exempt-Taxable-Exempt (ETE) and Exempt-Exempt-Taxable (EET) are three important terms in the context of investments made for the purpose of saving tax. In general, there are two prime motivations for investing: either to save tax or to grow your wealth. Your investment will be taxed at three stages – when you put your money in an instrument (Stocks, Bonds or Funds), when there is an interest yielded on the investment and when you withdraw the entire amount (returns and your principal sum).
To know more on this, we have provided a detailed overview of the above investment categories and their corresponding exemptions:
The first exempt of this ULIP implies that your investment is qualified for a deduction. Hence, the amount of your salary, which is equivalent to the invested amount will not be taxed. The second exempt denotes the accumulated interest over a period, which is also not taxable. For the next exempt, your income generated from the investment will not be taxed when you make a withdrawal.
This policy is perfect for customers who wish to make long-term investments, for example, Public Provident Fund and Employee Provident Fund. Few other plans like equity-linked savings schemes and life insurance policies provided by Bajaj Allianz at Finserv MARKETS also qualify for the EEE status. By choosing Bajaj as your insurer, you’ll be allowed unlimited free switches between funds. Recently, the new pension system was classified as EEE in the revised draft of Direct Taxes Code, but insurance cum investment plans and ELLS were moved to the EET category.
EET-Exempt Exempt Taxable
EE here means that during the stages of contribution and accumulation, your invested amount is tax exempt. The T here implies that the total amount will be taxed during any withdrawal. As the lump-sum amount is taxable during withdrawal, the interest obtained is often low. However, your tax slab will have a bearing on the interest earned; this could often mean lucrative returns. For availing a plethora of fund options to invest in, choose Bajaj Finserv today!
ETE-Exempt Taxable Exempt
The foremost exempt (E) signifies that your income amount equivalent to the investment money is qualified for deduction as per the total exemption limit. However, the interest obtained from these investments is taxable and is therefore denoted as T. The final E implies that the lump-sum amount withdrawn up on maturation is tax-free. This means, only the interest part of your investment will be taxed.
Now that we have discussed the above mentioned ULIP tax benefits, based on your life goals, select either one of the unit linked insurance plans – Bajaj Allianz Future Gain or Bajaj Allianz Life Goal Assure, available on Finserv MARKETS. You can always visit the Finserv MARKETS website or contact us for further details.
Not just tax benefits, high ulip returns is another reason why you should consider investing in such a plan.
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