Budget Expectations: GST should be reduced on insurance products, government should increase the limit of 80C – Industry

Budget 2024, Insurance Industry Demand: Finance Minister Nirmala Sitharaman will present the Union Budget 2024 on July 23. Everyone from the common man to the industry is keeping an eye on the budget.

Every sector hopes that this budget will bring some relief news for them. Talking about the insurance industry, it believes that there is a need to reduce the cost of insurance products. Also, to expand it as much as possible, tax rates should be reduced. Be it health insurance or life insurance, it is necessary to impose minimum tax of GST on them.

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Shriram General Insurance Company’s Executive Director and CIO Ashwani Dhanawat says, “We hope that the government will focus on several key sectors necessary for economic growth and public welfare in the upcoming budget. We welcome the possibility of a high budgetary allocation for the insurance sector. This will enhance IRDAI’s ability to provide comprehensive coverage and effective solutions to a large population in achieving its ‘Insurance for All’ mission.”

Vivek Jain, Head of Investments, Policybazaar.com, says, the insurance sector has a lot of expectations from the budget. Especially, taxation for pension products should be reconsidered. To make retirement policies more attractive, the insurance industry is demanding the government to give pension products the same tax benefits as the National Pension System (NPS). This will help ensure a secure financial future for the elderly of India.

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GST reduced, deduction limit increased

Ashwini Dhanawat says, healthcare costs are constantly increasing. In view of this, we hope that the deduction limit for health insurance premium will be increased. This will provide relief to the policyholders. Apart from this, there is a need to reduce GST on health insurance policies. This will make these essential products cheaper and will make them accessible to more and more people.

Rishabh Garg, Head (Term Insurance) of Policybazaar says, the scope of tax deduction under section 80C should be increased. It has been 1.5 lakhs for a long time. Apart from this, the GST rate should be reconsidered. Currently it is 18% for health and term insurance. This limit should be reduced to 5%.

The industry says that the tax deduction limit for health insurance premium should be increased. Especially for individuals, their spouses and dependent children, the tax limit should be increased to Rs 50,000 and for senior citizen parents, the limit should be increased to Rs 1 lakh. Also, Health Savings Account (HSA) should be tax free. These changes will encourage health and wellness.

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