Budget 2024: As the insurance industry anticipates a pivotal shift, stakeholders are closely watching for key changes that could reshape the financial landscape. From tax reforms to regulatory adjustments, the sector is poised for transformation. Here’s a closer look at the significant expectations that could define the future of the insurance industry.
Tax Parity for Retirement Solutions
Achieving tax parity for retirement solutions, especially pension and annuity plans, is a top priority. The push is to extend the ₹50,000 tax exemption for the National Pension Scheme (NPS) to these plans, fostering a more level playing field for enhanced social security.
Regulatory Flexibility and Technological Advancements
The sector is advocating for regulatory flexibility, including tax benefits, eased deductibility limits, and reduced GST rates. Simultaneously, the industry seeks regulatory support for insurtech distributors, fostering accessibility to insurance in tier 2 and 3 cities.
Making Insurance Accessible
Overcoming distribution challenges, there’s a call for government support in the form of tax rebates and lowered GST rates for insurtech distributors. The goal is to leverage technology to bridge distribution gaps and extend insurance accessibility to a broader population.
Annuity Tax Break and GST Rationalization
In anticipation of a cautious budget, there’s a focus on crucial changes for the annuity market. Calls include a tax break on annuity, elimination of double taxation, and the rationalization of GST rates on life insurance term policies for increased affordability.
Health Insurance Tax Benefits
Tax benefits play a pivotal role in encouraging health insurance purchases. Expectations include linking the 80D tax exemption limit to inflation, periodic revisions, and an increase in the limit for claiming tax deductions under Section 80D, particularly for health insurance for senior citizens.
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