Consumers are now more aware of the role that insurance plays in financially protecting themselves and their families, but there is still a long way to go.
From the perspective of the insurance sector, there are some important recommendations that the Minister of Finance expects to address in the future. Union budget February 1.
- For insurance policies, we recommend a separate deduction section or increase the limit under Section 80C of the Income Tax Act. Section 80C currently provides tax credits of up to Rs 1,50,000 for many investment options, including: PPF, ELSS, NSC, NPS, insurance policies, etc., this section is very cluttered and crowded. Providing a separate deduction section for insurance allows customers to see insurance as an integral part of their financial planning, not just a tax-saving tool.
- Tax law can be regulated at least 7 times more than the coverage of individuals over the age of 45.
- I also feel that the current upper limit of health insurance premiums (including preventive health insurance costs) is low and needs to be raised.
- Another move in the right direction is to make pensions tax exempt.By doing so, with this segment National pension system (NPS), which allows an additional tax exemption limit of Rs50,000 above Rs. 15,000 rupees under section 80C. It also helps drive demand for annuity products and make this segment more attractive to customers.
- Life insurance provides important financial protection and support for life uncertainties, so it is also advisable to lower the applicable ones. GST It is possible with life insurance of 18% to 12% or less. Japan’s insurance penetration rate is low, and lowering the GST rate will be the first step toward increasing demand.
- Another move that will bring great benefits to the sector is FDI From 49% to 74%, it is consistent with 100% FDI AMC and 74% FDI banks. Insurance is a capital-intensive business and Indian partners may be reluctant to inject the required capital. Due to this pandemic, some companies may need capital injections to save solvency limits. Finally, it gives foreign promoters the opportunity to buy their underfunded Indian partners.
- Finally, TDS The exemption limit for insurance fees from the current level of Rs 15,000 (based on Section 194D of the Income Tax Act) provides greater impetus for insurance agents.
(Vighnesh Shahane is MD and CEO of Ageas Federal Life Insurance. The view is his own)
Insurance Sector Budget Recommendations: Budget Wish List from Insurance Companies: Additional Tax Refunds and Tax Exempt Pensions
https://economictimes.indiatimes.com/markets/stocks/news/budget-wishlist-from-insurers-extra-tax-rebate-and-tax-free-annuities/articleshow/80419902.cms Insurance Sector Budget Recommendations: Budget Wish List from Insurance Companies: Additional Tax Refunds and Tax Exempt Pensions