Budget 2020:Govt may not provide any more tax incentives for the insurance industry
The official representative bodies of the domestic insurance industry like General Insurance Council and Life Insurnace Council in course of the their routine pre-Budget discussions with the tax authorities, have been told not to demand any more tax incentives for the industry as the scopes for such incentives currently are extremely limited because of poor mobilisations of the tax proceeds during year.
Even as the insurers have put forward their long Budget wish list ,the country's direct tax collecting body Central Board of Direct Taxation(CBDT) has informed the insurance industry not to expect any tax incetives for the industry in the fortncoming Budget- 2020 that would be presented by union finance minister Nirmala Sitharaman on February 1.
The CBDT has informed the insurance industry that any more tax incentives are not possible as part of Budget 2010, in view of shortfall in the tax collections in the current fiscal
The official representative bodies of the domestic insurance industry like General Insurance Council and Life Insurance Council in course of the their routine pre-Budget discussions with the tax authorities, have been told not to demand any more tax incentives for the industry as the scopes for such incentives currently are extremely limited because of poor mobilisations of the tax proceeds during year.
``We have been told by the top CBDT officials in course of our discussion not to press for any further tax incentives in the forthcoming Budget, as there are no scopes for them,'' said sources in the industry.
``We request finance minister Sitharaman consider a separate deduction to be provided for premium paid on individual life policies. If no separate deduction is provided, the existing limit of Rs 1,50,000 (i.e. section 80C) should be enhanced from Rs 1,50,000 to Rs 3,00,000, since the existing limit of Rs 1,50,000 is too crowded with both short-term and long-term investment vying for its share,’’ said .S N Bhattacharya, secretary, Life Insurance Council.
Life insurance meets the twin needs of providing protection as well as long-term savings with the goal of meeting living needs. It is particularly needed in the absence of the government’s social security scheme that is present in many global economies, explained Bhattacharya.
According to Kamlesh Rao, MD & CEO, Aditya Birla Sun Life Insurance. another important move would be to encourage women to insure their lives and savings. Extra tax benefit for women policyholders will be a significant step. Moreover, relaxation of section 10(10)(D), where minimum sum assured is required to be 10 times of annual premium will be a desirable move.
R M Vishakha, managing director & CEO, IndiaFirst Life Insurance felt,''The upcoming budget is anticipated to be consumer focused. In line with the same, we are hopeful that the 80C tax benefit is enhanced from the current Rs 1.5 Lakh. Additionally, for greater focus on risk management across protection and long-term savings, a specific 80C sub limit solely for life insurance is desirable.
``Currently, 18 per cent GST rate is applicable for majority of insurance products. This rate is levied on the premium paid by the customers and hence can be a dampener for them to opt for insurance. I feel the Government can look at reduction in GST across insurance products, to encourage purchase of this important financial tool. Also, I feel giving tax exemption for home insurance just like health insurance deduction under 80 D will encourage people to opt for it,'' saiod Tapan Singhal, MD & CEO, Bajaj General Insurance.