The salaried middle class taxpayers are expecting a ‘populist’ budget in 2022 from Finance Minister Nirmala Sitharaman. Amid the outbreak of Covid-19 ommicron third wave, taxpayers seek more relief Union Budget 2022, To benefit from a higher ceiling in the standard deduction for premiums for life insurance policies, there are several new measures in the budget wish list of the middle class for 2022. take a look
Higher deduction on life insurance premium above 80C
Budget 2022 Industry experts believe that should pave the way for introduction of a separate section under the Income Tax Act for claiming deduction on insurance premium. At present, taxpayers can claim benefit for insurance premium under Section 80C. The upper limit for claiming relief under section 80C has been kept at Rs 1.5 lakh. Apart from the insurance premium, the taxpayer can claim benefits for several other investments under the above section. So now is the time that the Finance Ministry in Budget 2022 introduces a separate clause for claiming income tax benefit for premiums paid for life insurance policies.
“Life insurance is a long-term solution unlike other financial products, which have a shorter investment horizon and are covered under 80C provision. We expect the budget to provide a separate tax deduction for premiums paid for life insurance. This will enable a more logical segregation of customers’ funds in the long term and the short term,” said Subrajit Mukhopadhyay, executive director, Edelweiss Tokio Life Insurance.
Firstly, it will encourage more salaried individuals to invest in life insurance policies. In a country like India, where the reach of life insurance policies is still very low, there is a need for some additional measures like tax incentives to boost consumption, experts opine. The insurance industry demanded special incentives for women insurers and first time life insurers to bring more people under life insurance cover.
Reduction in GST on Life Insurance Premium:
Industry experts agree that affordability is a major factor when it comes to buying life insurance. At present the insurer has to pay a hefty amount of 18% Goods and Services Tax (GST) on the life insurance premium. An expert said that this additional tax on term cover increases the premium amount which acts as a deterrent for many potential policy buyers. Removal of GST on life insurance premiums may make the covers more affordable for the common man.
“Reduction in GST on insurance premium, and stamp duty exemption for life insurance policies will help boost insurance penetration in the country. Shriram Life Insurance Managing Director Manoj Jain said, “The government should also focus on rationalizing GST on term products to make safety-oriented products more affordable.” “Covid-19 has increased the awareness for insurance products. Individuals now want to protect themselves and their families from financial uncertainties, diseases and death. There has been a marked increase in both life as well as health insurance products. The amount of premiums paid by policyholders has also increased. Hence, the increased deductibles will provide the much needed impetus to improve insurance access, said Niraj Shah, Chief Financial Officer, HDFC Life Insurance, for life and health insurance premiums.
read all breaking news, today’s fresh news And coronavirus news Here.
,