Union budget 2021-22: On 1st February 2021, our Union Finance Minister Nirmala Sitharaman will manifest the budget of FY 2021-22. This will be the third budget of the second term of the Modi government. Due to the corona epidemic and consequent economic crisis, this budget has become really important for every citizen. Therefore, people have high expectations from the upcoming budget. Meanwhile, the insurance sector has also high hopes in making insurance compulsory, raising awareness and tax exemption limit from the finance minister Sitharaman regarding the budget.
Measures to raise awareness
The Managing director Neeraj Prakash, Shriram General Insurance said that ”taking any kind of insurance is still seen as an expense in our country rather than protection from a bad financial situation. To increase the reach of non-life insurance, the government can give more tax benefits. With this, new insurance schemes can be introduced and can include more products in the compulsory cover”.
Increase in tax exemption limit
”At present, all life and health insurance policies are exempt under section 80C of the Income Tax Act. Under the section, there is a tax rebate of up to Rs. 1,50,000 on individual investments. According to insurance companies, this is very low. The big problem in this is that the 80C includes many other products like ELCC, PPF, NSC, SSSC etc. Hence policyholders get adequate benefits. The government may consider raising the limit for this under a separately exempted section or section 80C of the Income Tax Act, 1961, as the existing limit of Rs 1,50,000 is lower.” Added Neeraj Prakash.
The co-founder of Turtlemint, Dhirendra Mahyavanshi stated that “the limit of section 80C can be increased. He said, however, that the limit was raised to Rs 50,000 in the earlier budget. But it was only for senior citizens. He hopes to increase it for the common people in this budget. Dhirendra Mahyavanshi has also said to include pension plans in section 80CCD”.
As per Dhirendra point of view, under section 80CCD (1B), the NPS scheme gets an additional deduction of Rs. 50,000. This has affected the popularity of life insurance plans which are included only in section 80C, under which benefits of up to Rs. 1.5 lakh are available. They hope that deduction will also be available on life insurance pension plans under section 80CCD (1B), which will increase their popularity.
Social security, new scheme for people
One thing can be launched or implemented for senior citizens above 60 years of age, and that is the health insurance scheme to provide health or medical insurance. As these age groups, people are more prone to health issues according to Neeraj Prakash.
Make insurance mandatory
Neeraj Prakash stated that ‘’all properties should be compulsorily insured under the law. An income tax benefit should be introduced in the union budget 2021, in which the premium paid for house property insurance is exempt. This will increase the penetration of insurance. This would also ensure that people get a claim in the event of a natural disaster. People’s interest has increased in the era of the epidemic. Health and home insurance can be made mandatory in this budget’’.
Read the original article here: https://www.financialexpress.com/hindi/budget/union-budget-2021-expectations-for-insurance-sector-tax-exemption-increase-new-scheme-mandatory-insurance-expected-from-nirmala-sitharaman/2175736/