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Insurance companies require a separate exemption of Rs 1 lakh on insurance premium payment under Section 80C of the Income Tax Act in the next general budget so that more people can be included in the scope of the sure. Insurers also want the current 18 per cent Goods and Services Tax (GST) rate on health insurance products to be reduced to five per cent to make such products more affordable for men. common. Finance Minister Nirmala Sitharaman will present the general budget for 2022-23 on February 1.
Tarun Rastogi, CFO of Canara HSBC OBC Life Insurance, said: “Industry lawmakers have long hoped to introduce at least a minimum tax on insurance premiums paid under section 80C to encourage people to take out life insurance. a separate exemption of at least one lakh rupee should be granted.” At present, all financial products fall under the income tax exemption section (80C) and its limit is Rs 150,000.
Subrajit Mukhopadhyay, CEO of Edelweiss Tokio Life Insurance, said: “We hope the budget will consider creating a separate section for tax deduction on premium paid for life insurance.”
Vignesh Shahane, managing director and chief executive officer of Aegis Federal Life Insurance, said Section 80C currently covers several investment options, including the Public Provident Fund (PPF), the Equity Linked Savings Scheme (ELSS) and the Certificate National Savings. Considering the current scenario, it would be nice to have a separate section for term policies.
According to the 2020-21 annual report of the insurance regulator IRDAI, the insurance contracting rate in the country is 4.2% of GDP, while globally this figure is 7.4%. In March 2021, the non-life insurance take-up rate was just one percent.