Delhi: Most of the people in the country take insurance to save tax without security. It is expected that in the coming budget (Union Budget 2023), the government will help in taking this service to maximum number of people by giving maximum concessions to the insurance sector. Apart from this, the government can also make pension/annuity tax free to encourage pension schemes. One option is to allow amortization of the principal component. Private sector should be given a level playing field to compete with NPS. The present limit of health insurance premium for availing exemption under section 80D is only Rs 25,000. This limit needs to be increased. Two years of Covid have proved that the existing limits are not enough.
Investment in the insurance sector will get a boost
Till a few years ago, the maturity amount of 2.5 lakh premium was tax free under section 10(10D) of Income Tax. It has been made taxable again. This decision should be withdrawn. This will encourage huge investment in the insurance sector.
1.5 lakh limit will be increased from 2 to 2.5 lakh
There are many investment options under section 80C of income tax. But life insurance premium, PPF, ELSS, NSC, NPS, home loan principal amount etc. We expect the government to create a separate bucket for insurance policies or increase the current limit of 1.5 lakhs from 2 to 2.5 lakhs.
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Expected to increase TDS exemption on commission
It is expected that in the budget, the government will increase the TDS exemption limit on insurance commission under section 194D of Income Tax from the existing Rs 15,000. This will encourage insurance agents. Apart from this, 18 per cent GST on products like insurance is high. At least the basic security plan should come under zero GST.