Budget 2020- Impact of New Personal Tax Regime

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      With the announcement of Union Budget 2020, the highlight was the new personal income tax regime, which grabbed the attention.

      Income

      Income Tax (New Regime)

      Income Tax (Old Regime)

      Under Rs.2.5 lakh

      No Tax

      No tax

      Rs. 2.5- 5 lakh

      5%

      5%

      Rs. 5- 7.5 lakh

      10%

      20%

      Rs. 7.5- 10 lakh

      15%

      20%

      Rs. 10- 12.5 lakh

      20%

      30%

      Rs. 12.5- 15 lakh

      25%

      30%

      Above Rs. 15 lakh

      30%

      30%

      With the new personal tax regime, an individual cannot claim complete 70 income tax exemptions out of the total of over 100 exemptions. Besides, the salaried taxpayers who go for the new regime will now have to forgo the standard deductions and exemptions under HRA, investments made under 80C, 80D and LTA respectively.

      Under 80C, which encompasses both the Public Provident Fund and life insurance policy, a sum of up to Rs.1.5 lakh remains tax exempted. On the other hand, under section 80D, the medical insurance policy remains exempted. As said by the Finance Minister, in the coming times, all the exemptions will be ending.

      With the announcement of Budget 2020, the stocks of many private life insurance companies fell in between 10-14% and one of such companies life insurance companies even fell down by 6%.

      The new tax regime would be beneficial for those who have not opted for life insurance or medical insurance policy earlier. However, the millennia’s would be benefitted but that would be temporary and for a shorter duration.

      What remains a challenge is to witness the government intent of wedding all the exemptions in the coming times. The insurance industry is still hopeful that it would be done gradually.

      *Tax benefit is subject to changes in tax laws 

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      Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

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      *We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30- minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881.

      *Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. Policybazaar does not provide any medical or surgical advice or diagnosis and is not responsible for your interactions / treatment by a medical practitioner/hospital. Please consult a registered medical practitioner for any medical or surgical advice. The Information that you obtain or receive from Policybazaar, and its employees, or otherwise on the Website is for informational purposes only. As per the Insurance guidelines, you are allowed to cancel the policy with-in 30 days from the date of Issuance of policy.This option is available incase of policies with a term of one year or more.

      *All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

      **All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws.

      *₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

      *₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

      *₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

      *₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

      *No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

      *The values taken for effective cost calculation are indicative values and may change as per the selected plan.

      *Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

      *Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

      *The scope of coverage may vary from plan to plan.

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