Budget expectations: Insurance

27 Jan 2022 , 08:03 PM

“The ongoing pandemic has made Indians realise the importance of term insurance for the safety and security of their family. With the current level of under-penetration, the key task at hand is to make this significant financial protection tool more affordable for the masses and lucrative for taxpayers. We therefore propose to ease off the tax burden of 18% on term insurance policies and bring down the GST rate in the range of 2-5% to benefit end users.

For many years, life insurance is clubbed u/s 80C and the maximum tax benefit of Rs. 1,50,000 that an individual can avail gets divided with Pension Fund, NSC, PPF, SCSS, ELSS Mutual Funds, 5 years Bank FDs and Post Office Deposits. We propose a separate section under the income tax act which allows individuals to opt for an additional deduction over and above 80C for investing in a Life Insurance policy. With an increase in re-insurance premiums amidst the pandemic, there is also a need to provide enhanced deduction for insurance premium irrespective of the taxation regime opted by individuals/ HUF. This will reduce the social security burden of the Government.”

The author of this article is Mr. Parag Raja, MD & CEO, Bharti AXA Life Insurance

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com