Business EconomyPosted at: Sep 6 2025 8:37PM


Mutual Fund not to be affected by ULIP without GST

Chennai, Sep 6 (UNI) The scrapping of Goods and Services Tax (GST) on the Unit Linked Insurance Policy (ULIP) by the Indian government will not have any major impact on sales of mutual fund schemes, said a senior official of Bajaj Finserv Asset Management Ltd.
However, a life insurance expert had told this writer that the removal of GST on ULIP will give a big fillip to the life insurers to push the product. The Indian government has announced the GST exemption is for all individual life insurance policies including term, ULIP, and endowment plans and reinsurance services thereof.
ULIPS and mutual funds are two very distinct financial instruments and the recent changes in GST are unlikely to make a significant difference, Sorbh Gupta, Head- Equity, Bajaj Finserv Asset Management told this writer. On the other hand the more consequential differentiation between ULIP and mutual fund lies in the realm of direct taxation.
“ULIP investments up to Rs.2 lakh are exempt from capital gains tax, a benefit not extended to mutual fund investors. The mutual fund industry has been lobbying hard and if that is removed, mutual funds will not have a disadvantage against ULIP,” Gupta said.
According to him, the equity investments landscape is an under penetrated market in India, presenting enough opportunities for a diverse range of financial service providers- including portfolio management schemes, mutual funds, alternate investment fund (AIF) and equity linked insurances to have their fair share in the market.

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