Budget 2023: Expectations from Insurance Sector

 

Budget 2023:

Along with all the expenses, the insurance premiums are also increasing. In this context, the common people are hoping to give some incentives on insurance schemes in the upcoming budget.

Insurance related expenses have become crucial in the family budget of individual taxpayers. In the background of high inflation and rising medical expenses, the common man is expecting insurance-related relief from the new budget (Budget 2023) to be presented by Nirmala Sitharaman on February 1. The insurance industry also wants to provide benefits to the common man. It is said that as a result the industry will grow and insurance schemes will be available to all.

Section 80D limit increase:

At present, persons below the age of 60 can claim tax exemption on health insurance premiums paid for themselves, their spouse, dependent children or parents under Section 80D of the Income Tax Act, 1961. A tax deduction can be availed on premium payments of Rs.25,000 per financial year. If the age of parents is less than 60, their insurance premium is Rs. 25,000 will have a special exemption.

If above 60 years then this limit is Rs. 50,000 is up. In the background of increased medical expenses, there is a need to take insurance for a higher sum assured. In that case the premium will also increase. In this context, common people want to increase the tax exemption limits. It also helps more people to take insurance.

A separate section for life insurance:

An individual policyholder under Section 80C of the Income Tax Act can pay Rs. Exemptions up to 1.5 lakhs can be claimed. Apart from life insurance premiums, other investments including 'Unit Linked Insurance Plans' (ULIP) are covered under 80C. Section 80CCC of the Income Tax Act allows deduction on payments made by an individual towards annuity or pension plans.

 Exemptions under Section 80CCC are also combined with Section 80C to determine the total exemption limit. Currently, Section 80C allows exemptions on certain investments including public provident fund (PPF), five-year time deposit, life insurance premiums, ELSS mutual funds and interest paid on home loans. Despite rising inflation.. 80C maximum limit for nine years Rs. 1.5 lakhs. In this context, experts want to have a special section for exemption of life insurance premium on the lines of Section 80D to make life insurance more accessible to people.

80CCD for pension plans:

Investment in National Pension Scheme (NPS) Rs. 50,000 currently, there is a special tax exemption under section 80CCD(1B). But there is no special exemption for pension or annuity plans offered by life insurance companies (Section 80CCC). They are given under section 80C Rs. 1.5 lakh has been combined. However, there is a demand to extend the exemption under Section 80CCD to pension and annuity premiums provided by insurance companies.

GST should be reduced:

To improve the penetration of health insurance in India, the 'Insurance Regulatory and Development Authority of India (IRDAI)' has initiated several initiatives over the past few years. However, the expected results are not coming. In this context, insurance industry sources say that reducing the Goods and Services Tax (GST) can make insurance policies more affordable. Experts say that reducing the current 18 percent GST to 5 percent will help in that.

Exceptions to other insurances:

Currently, exemption under section 80C is available for life insurance premium. Health insurance premiums are exempted under section 80D. However, no exemption is available on premiums paid in travel insurance, home insurance and personal accident insurance policies. There is a demand to apply tax exemptions to these also.