Budget 2024 Demands: GST Cut on Life Insurance, Tax Exemption for Health Plans

Union Budget 2024 will be presented by Nirmala Sitharaman

Budget 2024 Demands: As the Budget 2024 is all set to be announced on July 23, there are various assumptions from the Insurance companies that the budget will bring major changes to the Insurance sector.

The Budget 2024 will be presented by Finance Minister Nirmala Sitharaman in the parliament.

As per the reports, the upcoming Budget 2024 is expected to reduce the Goods and Services Tax (GST) rates on Insurance products and bring administrative changes to make the Insurance products more appealing.

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However, a Tax deduction is expected especially in health insurance so that it becomes affordable to the customers.

BusinessToday reported that the Insurance companies are positive that the government will change the current tax system to exempt life insurance products.

However, currently, the new tax system does not provide any kind of exemptions for these products.

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News 18 reported that it is expected that the Section 80D deduction limits for health insurance payments paid for oneself, dependents, and parents will increase.

Thus this increase in Tax deduction limits for health insurance will give more tax breaks when paying for health care and motivate the people to invest their money in Insurance.

Experts believe that this major development in tax benefits will motivate people to buy insurance and expand the sector more.

Rakesh Jain CEO of Reliance General Insurance emphasizes lowering the upper limit For Tax Exemption

The CEO of Reliance General Insurance, Rakesh Jain said quoted by Business Today, “We laud the IRDAI's initiatives to prioritise the wellbeing of policyholders, from implementing cashless systems to emphasizing Ombudsman schemes, ensuring policyholders' interests are safeguarded.”

“However, with increasing climate change and economic development-related risks, there is a pressing need to protect against unforeseen disruptions. The upcoming Union Budget 2024 presents an opportunity to promote sustainable development goals by prioritizing risk management and protection.”

Rakesh Jain further suggested that the government should think about the following means:

Raise the upper limit for tax exemption so that health insurance payments can be paid without paying taxes to INR 75,000.

Offer tax relief to people who buy full insurance for their electric cars (EVs).

Provide assistance to small and medium-sized Cyber insurance by giving tax benefits so they can better handle cyber risks and data leaks.

All employers should provide health insurance to their employees, this will help the working class with all types of protection.

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Tarun Chugh CEO of Bajaj Allianz Life Insurance emphasizes lowering the GST rates and Capital gains high-value products

MD and CEO of Bajaj Allianz Life Insurance, Tarun Chugh emphasizes lowering the GST rates on life insurance, he said, “As an industry, some of our budget expectations from the finance ministry is to consider lower GST on life insurance products.”

He also added, “Additionally, in the pension products category, with the objective of securing post-retirement financial needs of the individuals, we urge the government to align life insurance annuity or pension products with the National Pension Scheme (NPS) and allow the similar additional deduction of Rs. 50,000 or more for life insurance annuity or pension products under Income Tax.”

Tarun Chugh emphasizing Capital gains for long-term high-value items added, “We also request the ministry to introduce Long Term Capital Gain taxability for all high-value traditional life insurance plans (more than Rs.5 lakhs aggregate annual premium), in line with high-value ULIPs. This will bring in uniformity and tax efficiency for insurance customers at par with other similar financial products in the market.”

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