Ahead of the Union Budget 2023, insurers are hoping that the Centre will act on their recommendations, which includes increasing the limit for tax deduction under 80D of the Income Tax Act.
Also among them are issuance of long-term bonds, tax incentives for home insurance premiums, and a separate section to claim deduction for term-insurance premium, among others. These suggestions would help improve the penetration of insurance in the country.
Further, another long-standing demand is rationalisation of goods and services tax (GST) on insurance products.
For the last few years, insurers have been recommending to the government to increase the limit of tax deduction under 80D of the Income Tax Act.
Under this section, a person can claim a deduction of up to Rs 25,000 for health insurance premium and expenses incurred towards health care. A maximum of Rs 50,000 can be claimed for deduction under this section if the person is paying health insurance premium for his/her parents also.
“In view of the inflation, the current maximum limit of Rs 50,000 may be increased to Rs 1 lakh in order to induce people to take adequate insurance cover.
Further, deduction of health insurance premium under u/s 80D should also be allowed under the new tax regime,” said Rakesh Jain, chief executive officer (CEO), Reliance General Insurance.
