Budget 2023: Big blow on ‘insurance policy’ in the budget! Do not buy this policy if you want tax free returns
Tax exemption will no longer be available on insurance policies with a premium of more than 5 lakhs.
Income tax exemption is to be limited on income from insurance policies with higher value.
Insurance industry experts said – this will affect the business of insurance companies.
Budget 2023: Central government income tax slab (Income Tax Slab) Has given a big relief to taxpayers by making changes in the tax exemption, but the government has changed the life insurance policy in the hope of tax exemption. (Life Insurance Policy) The buyers have been given a big blow. The government has been promoting the new tax system for some time, in which there is no provision for deduction and exemption.
Finance Minister Nirmala Sitharaman put forward a new proposal in Budget 2023, in which there will be no exemption on receipts i.e. income above a limit. Finance Minister Nirmala Sitharaman announced in the budget speech that tax exemption will no longer be available on income from traditional insurance policies with a total premium of more than 5 lakhs.
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No tax exemption on premium above Rs 5 lakh
According to the budget proposal presented by Finance Minister Nirmala Sitharaman on Wednesday, if the total annual premium is more than five lakh rupees, then the maturity amount of the life insurance policy will have to be taxed. The Finance Minister proposed in the budget that for life insurance policies (other than ULIPs) issued after April 1, 2023, if the total premium exceeds five lakh rupees, then the policies in which the total premium is up to five lakh rupees will be exempted. will be given.
Relief will be available in these cases
According to the proposal, the existing tax exemption on the amount received in the event of the death of the insured person will remain intact. He said that the new system will not be applicable to insurance policies issued till March 31, 2023.
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Loss to insurance companies due to the decision
Responding to the government’s decision in the budget, experts associated with the insurance sector told Money Control that the government’s decision to promote the new tax regime will affect the business of insurance companies, as most taxpayers can buy insurance policies only under section 80C. Buy to take advantage of the discount available. Therefore, this decision will affect the sale of insurance policies.
Balachander Shekhar, co-founder of RenewBay, said, “The end of tax free status for life insurance policies with a premium of more than 5 lakhs will not make much difference to the attitude of insurance companies and consumers. The trend of some consumers may move towards products like term plans, complete risk cover and investment oriented unit linked insurance.
(with input from language)
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Tags: Budget, Budget 2023, insurance company, Insurance Policy
FIRST PUBLISHED : February 01, 2023, 19:35 IST