Quick Summary
The insurance industry has put forth significant demands ahead of the Union Budget, focusing on easing tax burdens and improving insurance accessibility for the public. Industry leaders have proposed measures like lowering GST rates on insurance, revising tax exemptions for health insurance premiums, and introducing tax-saving retirement security bonds. Decline in Insurance Penetration and Rising Medical Inflation The industry's demands are backed by alarming data trends: Insurance Penetr
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FAQ :
The insurance industry is advocating for a reduction in the Goods and Services Tax (GST) on insurance premiums from the current 18% to 12%.
The industry seeks to revise tax exemptions under Section 80D because the current deduction limit for health insurance premiums has remained stagnant at ₹25,000 since 2015, while medical costs have significantly increased.
Proposals include extending the ₹50,000 NPS deduction to annuities, simplifying taxation on pension products, and introducing tax-free retirement security bonds.
India's insurance penetration has slightly decreased to 3.7% in 2023-24, down from 4% in the previous year.
Medical inflation is estimated at a high 14%, making healthcare increasingly unaffordable for many households, which bear over 44% of health expenses.
Yes, the industry suggests zero-rating schemes like PMJJBY and smaller insurance policies with a sum assured up to ₹2 lakh from GST.
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