In order to seek a reduction in the taxation on insurance policies, the officials from Insurance Regulatory and Development Authority (IRDAI) are anticipated to meet with Union Finance Minister Nirmala Sitharaman on Tuesday. The insurance industry is likely to urge Sitharaman to increase the premium cap for taxes from Rs 5 lakh per year to Rs 10 lakh per year.
Life Insurance Premium
In Budget 2023, the Finance Minister considered limiting the income tax exemption on expensive life insurance contracts. “It is recommended that revenue from only those plans shall be exempted where the cumulative premium for life insurance policies (other than ULIP) would be above Rs 5 lakh”, Budget 2023 documents stated.
In simple terms, if an individual pays a savings life insurance premium of more than Rs 5 lakh, their policy's income will be taxed when it matures. The first year's premium will be subjected towards the threshold of Rs 5 lakh taxation limit.
Life Insurance Premium
The Budget 2023 announcement had an effect on a number of the biggest insurers, including HDFC Life, Max Life, SBI Life and LIC. However, the insurance sector has suggested changing the threshold limit from Rs 5 lakh to Rs 10 lakh.
Currently, the implications of the adjustment are being assessed by the government. If the threshold limit of tax on insurance premium is revised, it will be a huge relief for life insurance companies. In addition, it's worth mentioning that these developments will neither affect the compensation paid upon the insured person's death nor insurance policies issued until March 31 2023.
For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true, and top stories of the world.
Life Insurance Premium
In Budget 2023, the Finance Minister considered limiting the income tax exemption on expensive life insurance contracts. “It is recommended that revenue from only those plans shall be exempted where the cumulative premium for life insurance policies (other than ULIP) would be above Rs 5 lakh”, Budget 2023 documents stated.
In simple terms, if an individual pays a savings life insurance premium of more than Rs 5 lakh, their policy's income will be taxed when it matures. The first year's premium will be subjected towards the threshold of Rs 5 lakh taxation limit.
Life Insurance Premium
The Budget 2023 announcement had an effect on a number of the biggest insurers, including HDFC Life, Max Life, SBI Life and LIC. However, the insurance sector has suggested changing the threshold limit from Rs 5 lakh to Rs 10 lakh.
Currently, the implications of the adjustment are being assessed by the government. If the threshold limit of tax on insurance premium is revised, it will be a huge relief for life insurance companies. In addition, it's worth mentioning that these developments will neither affect the compensation paid upon the insured person's death nor insurance policies issued until March 31 2023.
For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true, and top stories of the world.
