Insurers want tax exemptions to expand reach
Insurance firms feel that tax exemption could make more people buy insurance products and stay put longer. They want tax exemption for home insurance; increase its scope for life insurance and that for health insurance to be multiplied by number of years of coverage.
For health insurance, tax exemption is available only in the year of payment. To encourage people to insure themselves for longer period, tax exemption should be available each year, based on number of years covered. “Tax exemption can be mult­iplied by number of years of coverage. For example, in ca­se of 3-year premium pa­id, limit should be Rs 75,000 for self, spouse and kid (Rs 25,000 per years x3 years) and Rs 90,000 for parents (Rs 30,000 per years x3 years),” said Ashish Mehrotra, MD & CEO of Max Bupa Health Insurance.
“The budget providing 100 per cent exemption on premium paid without any cap, especially am­o­ng you­th would promote health and wellness,” said V Jagannathan, CMD, Star He­ath and Allied Insurance.
They also want the government to allow long term savings-linked health insurance products in which the pre-defined component of premium would go under the investment category. In­surers also feel the 15 per cent service tax is a deterrent for those see­k­ing to buy health insurance.
“There is a rapid rise in the number of Indians travelling and we hope the government considers including travel insurance premium under section 80D of the I-T Act for rebate purposes. A travel insurance policy will help people ease any financial burdens that occur during travel,” said Antony Jacob, CEO, Apollo Munich Health Insurance.
In the event of natural disasters, insurers also seek tax exemption for home insurance. “The data on the frequency of floods hitting the country has revealed high number of losses to property, assets and lives. Since, house is one’s biggest financial asset, introducing I-T exemption on premium paid will get more people to opt for home insurance, said KG Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance Company.
Life insurers want the budget to move annuity out of tax bracket to provide relief to almost 10 crore senior citizens thus addressing the long-standing need for stre­amlining tax saving vehicles.
Sangeetha G.