Budget FY 2018-19: Will it Provide Tax Relief for Health and Life Insurance & Pension Plans?

A question on everybody’s mind right now is -will the coming budget offer tax relief for buying more insurance coverage? The insurance sector’s wish list includes the call for offering for more tax sops for insurance purchases and GST exemption of insurance plans.

According to Sanjiv Bajaj, MD and VC, Bajaj Capital- Life insurance is an absolute necessity for individuals for financial security. Earlier, it had a defined and clear (almost) exclusive space in Section 80C of the Income Tax Act. Now a wide variety of products are added to Section 80C, the need and importance for life insurance family are going down.

While poor insurance penetration & insufficient life coverage is prevalent in India, offering tax-benefits for term insurance would be helpful in creating insurance demand would end up in building a strong social security layer for the individuals. As per Yashish Dahiya, Co-Founder & CEO, Policybazaar.com only 8 percent of the Indian population was covered by any insurance plan such as term insurance, health insurance, and ULIPs. There is a need to addresses the insurance industry in the much awaited Union Budget FY 2018. Government must provide benefits of social security; individuals of other countries such as the US are already covered under state-sponsored social security plans.