Calculate NRI ULIP maturity tax for 2026 and check whether your Indian insurance payout qualifies for exemption. The calculator evaluates premium limits, the sum-assured test, taxable ULIP gains, LTCG and cess.
If you are an NRI with an Indian ULIP or life insurance policy, the first question is simple: is the maturity amount taxable in India? The answer depends on the policy type, issue date, premium, sum assured and the amount received. This NRI Insurance / ULIP Maturity Tax Calculator checks those conditions before estimating tax.
For a wider explanation of current ULIP rules, see Toolisky's ULIP Taxation in India 2026 guide. If the payout becomes taxable as capital gains, you can cross-check it with the ULIP Capital Gains Tax Calculator.
The NRI Insurance / ULIP Maturity Tax Calculator estimates Indian tax on maturity or the first taxable receipt from an Indian ULIP or other life insurance policy. It is designed for NRIs, returning Indians, overseas professionals with Indian policies, and CAs handling NRI tax work.
It checks the insurance exemption first, then moves to the relevant tax route if the exemption fails.
For Tax Year 2026-27, the Income-tax Act, 2025 applies to tax years beginning on or after 1 April 2026. The insurance maturity exemption now sits in Schedule II, Serial No. 2, while taxable non-exempt ULIP receipts are covered by the capital-gains provisions. The Income Tax Department's current framework is the starting point for 2026-27 calculations.
The core insurance test is highest annual premium payable ÷ actual capital sum assured × 100. Depending on the issue date and statutory category, the historical limit can be 10%, 15% or 20%. Check the policy issue date before choosing the percentage.
For ULIPs issued on or after 1 February 2021, the Finance Act 2021 introduced an additional ₹2.5 lakh aggregate annual premium condition. The ₹2.5 lakh figure applies to the relevant ULIP pool rather than acting as a simple per-policy shortcut. Death proceeds remain outside this premium-cap restriction.
For non-ULIP life insurance policies issued on or after 1 April 2023, the Finance Act 2023 introduced a separate ₹5 lakh aggregate premium condition. Policies issued up to 31 March 2023 are not brought into that new ₹5 lakh rule. Death benefits remain unaffected.
For an applicable long-term ULIP capital gain, the current equity-oriented capital-gains framework can produce 12.5% tax above the aggregate ₹1.25 lakh Section 112A threshold. Applicable short-term gains use 20%. Health & Education Cess is 4% of the income-tax amount, before any applicable surcharge. Current capital-gains rates were changed by the Finance (No. 2) Act, 2024 and continue into the current framework.
The calculator shows base tax plus 4% cess. It excludes surcharge, DTAA relief, foreign-tax credit and lower/nil withholding certificates.
The tool checks exemption before tax. That order matters because an exempt maturity has no capital gain to tax.
If you also need your wider India-source income, use Toolisky's NRI Tax Calculator. Your residential status can affect the overall return, so check it separately with the NRI Residential Status / RNOR Calculator.
Priya is an NRI living in Dubai. She owns an Indian ULIP issued in April 2021.
Her highest annual premium is ₹3,00,000. Her actual capital sum assured is ₹30,00,000.
The premium ratio is:
₹3,00,000 ÷ ₹30,00,000 × 100 = 10%
The ratio passes the 10% test.
Her aggregate annual ULIP premium is ₹3,00,000. That crosses the applicable ₹2.5 lakh ULIP premium limit for policies issued from 1 February 2021. The maturity exemption therefore fails even though the ratio test passes.
Priya has paid ₹18,00,000 in total premiums. She receives ₹30,00,000 at maturity.
Her first taxable ULIP gain is:
₹30,00,000 − ₹18,00,000 = ₹12,00,000
Assume the holding period is more than 12 months and the gain falls within the Section 112A framework.
Priya has no other qualifying Section 112A LTCG.
The amount above the ₹1.25 lakh threshold is:
₹12,00,000 − ₹1,25,000 = ₹10,75,000
Base LTCG tax:
₹10,75,000 × 12.5% = ₹1,34,375
Health & Education Cess:
₹1,34,375 × 4% = ₹5,375
Estimated tax:
₹1,39,750
The calculation excludes surcharge and DTAA relief. If you're filing an Indian return from overseas, check the treaty position and your TDS before treating this number as the final amount payable.
The Income-tax Act, 2025 applies to Tax Year 2026-27. For insurance maturity calculations, the statutory location has changed from the old Income-tax Act, 1961 numbering to the 2025 Act framework. Use the current Act when preparing a return for a tax year beginning on or after 1 April 2026. Income Tax Department — Income-tax Act, 2025
The ₹2.5 lakh ULIP premium rule remains the key threshold for applicable ULIPs issued from 1 February 2021. The Finance Act 2021 also kept death benefits outside this premium-cap restriction. Finance Act 2021 — Union Budget
The ₹5 lakh aggregate premium rule applies to non-ULIP life insurance policies issued on or after 1 April 2023. It doesn't change the death-benefit exemption or bring policies issued before that date into the new cap. Finance Act 2023 — Union Budget
The current equity-oriented capital-gains rates are 20% for applicable short-term gains and 12.5% for qualifying long-term gains above the ₹1.25 lakh Section 112A threshold. Add 4% Health & Education Cess to the tax amount. Finance (No. 2) Act, 2024
For a broader NRI calculation, use the NRI Tax Calculator. If you're unsure whether you qualify as an NRI for the relevant tax year, start with the NRI Residential Status / RNOR Calculator.
A qualifying Indian ULIP maturity can remain exempt from Indian tax. For applicable ULIPs issued from 1 February 2021, check the premium-to-sum-assured condition and the ₹2.5 lakh aggregate premium rule. If the exemption fails, the taxable ULIP gain can move into the capital-gains framework.
The ₹2.5 lakh rule applies to applicable ULIPs issued on or after 1 February 2021. The premium condition is checked across the relevant ULIP policy pool rather than treating the number as an automatic exemption for every individual policy. Death benefits remain outside this premium-cap condition.
First check whether the insurance maturity exemption applies. If a taxable ULIP receipt falls under the capital-gains rules, calculate the gain from the amount received, including bonus, less the aggregate premiums paid up to that receipt. Then apply the relevant holding-period rate and the applicable Section 112A threshold.
For an applicable equity-oriented ULIP gain, the long-term rate is 12.5% above the aggregate ₹1.25 lakh Section 112A threshold. Applicable short-term gains use 20%. Add 4% Health & Education Cess to the income-tax amount. Surcharge and DTAA relief require separate calculation.
The ₹5 lakh aggregate premium rule applies to specified non-ULIP life insurance policies issued on or after 1 April 2023. It isn't a rule that says every maturity amount above ₹5 lakh becomes taxable. The premium condition and the policy's issue date determine whether the exemption applies.
An NRI can pay Indian tax when an Indian insurance maturity fails the applicable exemption. The tax treatment depends on the policy type and the reason the exemption fails. DTAA provisions can affect the final liability, while withholding can be handled separately from the final tax calculation.
A qualifying ULIP death benefit remains outside the premium-cap condition. The Finance Act 2021 specifically retained exemption for amounts received on death without an annual-premium limit. That treatment is different from a maturity or surrender receipt, where the exemption conditions need to be checked.
Calculations verified by our team including CA Anita Patil. View our full accuracy policy and meet the team →
For informational purposes only. Results are estimates based on the inputs you provide and the rules in effect for the period shown, and are not tax, legal or financial advice. Verify figures against the relevant official source and consult a qualified professional before acting on them. Accuracy & limitations
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