Insurers seek separate income tax deduction limit

Budget 2022 expectations: The date for the Union’s 2022 budget is fast approaching and various industry insiders are swiftly passing on their wish list of Finance Minister Nirmala Sitharaman. This list also includes insurance companies. In the upcoming budget, insurers have asked the Narendra Modi government to provide a separate deduction limit under Section 80C of the Income Tax Act for life insurance. They said it would help increase the penetration of insurance in society.

Speaking on the 2022 budget and the income tax relief required for the general public; Abhishek Mishra, CEO and Senior Director of Bonanza Insurance Brokers, said, “Medical science has advanced tremendously over the past few years. However, it also increased the cost of treatments. Given this, it is important to increase the redemption limit in all categories. taxpayers, including the elderly. With multiple investment options under Section 80C of the Income Tax Act, people with shorter investment prospects often overlook life insurance, which is an investment product with long term. Providing a separate deduction limit under Section 80C exclusively for life insurance can be very beneficial as it will significantly improve insurance penetration.”

Echoing the views of Abhishek Mishra; Rakesh Goyal, Director of Probus Insurance, said: “Under section 80D an individual can claim up to 25,000 deductions for self and family on mediclaim premium payment. This limit should be increased to 50,000 to 75,000. Soaring medical costs and higher incidence of serious illnesses make it extremely expensive for low-income groups. Raising the cap on tax deductions may also further contribute to the penetration of health insurance.”

Union Finance Minister Nirmala Sitharaman will present her third Union budget to parliament on February 1, 2022.

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