Amendment of section 97.
155. In section 97 of the Finance Act (No.2) Act, 2004, (23 of 2004.) (hereafter in this Part referred to as the Principal Act),––
(i) in clause (13), in sub-clause (b), for the words “Mutual Fund;”, the following shall be substituted, namely:––
“Mutual Fund; or
(ba) sale or surrender or redemption of a unit of an equity oriented fund to an insurance company, on maturity or partial withdrawal, with respect to unit linked insurance policy issued by such insurance company on or after the 1st day of February, 2021;”;
(ii) after clause (13), the following clause shall be inserted, namely:––
‘(13A) “unit linked insurance policy” shall have the meaning assigned to it in Explanation 3 of clause (10D) of section 10 of the Income-tax Act, 1961;(43 of 1961.)’
Notes on Clauses:
Clause 154 and 155 of the Bill seeks to amend section 97 of the Finance Act (No.2) Act, 2004.
Chapter-VII of the said Act provides for Securities Transaction Tax.
It is proposed to amend sub-clause (b) of clause (13) of section 97 of the said Act so as to include sale or surrender or redemption of a unit of an equity oriented fund to the insurance company, on maturity or partial withdrawal, with respect to unit linked insurance policy issued by such insurance company on or after 1st February, 2021, under the definition of “taxable securities transaction”.
It is further proposed to insert clause (13A) to the said section define the expression “unit linked insurance policy”.
These amendments will take effect retrospectively from 1st February, 2021.
