Budget 2024: What the Insurance Sector Expects?

In the run-up to the Lok Sabha Elections, all of us are eagerly anticipating what the Finance Minister, Nirmala Sitharaman will announce in the upcoming budget. The Budget 2024 will be presented on 1st February 2024 by the finance minister, and everyone including the leaders from the insurance industry is looking forward to some positive changes in this budget session.

The government will announce the Budget 2024 in less than 30 days and insurance experts are optimistic that their long-awaited request to revise the taxation of different insurance schemes will be taken into account. Insurance Regulatory and Development Authority of India (IRDAI) has a vision of ‘Insurance for all by 2047’ to promote insurance penetration across the country and for the same here is what insurance experts are expecting in the upcoming budget.

The announcement on Budget 2024 is out now! Read here: www.insurancedekho.com/investment/news/interim-budget-2024

Tax Exemption on Annuity & Pension Plans

Retirement planning is important for all of us irrespective of our earnings to ensure steady income even after retirement. As of now, you can save tax of up to Rs. 50,000 on the National Pension Scheme (NPS), however, this is not the same with other pension and annuity schemes. When more tax exemptions are provided on annuity and pension plans, there will be more individuals investing in such schemes to reduce their tax liability. Even the MD and CEO of Aegon Life Insurance shared a similar thought and stated: “The current ₹50,000 tax exemption for NPS under Section 80CCD(1B) should also apply to pension and annuity plans to encourage more people to use them”. 

Separate Tax-savings for Term Insurance Plans

According to section 80C of the Income Tax Act of 1961, individuals can save a total of Rs. 1,50,000 on PPF, Life Insurance, National Savings Certificate, ELSS, Sukanya Samriddhi Yojana, and others. Now in the upcoming Budget 2024, insurance industry experts are expecting that separate tax exemptions will be offered on term insurance plans so that more and more people are inclined towards buying term insurance plans with higher coverage.

Life Insurance Premiums to Be Completely Tax-free

Another wishlist of the insurance leaders is that the premiums paid towards life insurance plans are made completely tax-free. This is important because when more tax exemptions are offered, the number of individuals buying life insurance plans will also see an increase.

GST Reduction on Insurance Products

Insurance industry experts are also expecting that the Goods and Services Tax (GST) will be lowered on specific insurance schemes to encourage more people to buy these schemes. Sathishwar B, MD and CEO of Aegon Life said that ‘zero rating’ should be implemented on some policies such as Pradhan Mantri Jeevan Jyoti Bima Yojana, NPS, etc. 

Take Away

Thus, with the Budget 2024 announcement to happen in a few days, the insurance industry is expecting a lot of reforms in the existing taxation scheme on insurance plans. The motive behind the above-mentioned expectations to be implemented in the upcoming budget is only to increase insurance penetration across the country. Let's see what the Budget 2024 holds for us. For more details on the upcoming budget, you can check our InsuranceDekho website for regular updates.