Interim Budget 2024: Insurance Regulatory and Development Authority (IRDAI) is trying to bring people under the ambit of insurance cover. It has planned to bring everyone under health, life and property insurance cover by 2047. Giving tax exemption on purchasing insurance products can increase people’s interest in purchasing them.
India Budget 2024 : Insurance Regulatory and Development Authority ( IRDAI ) has made a plan to bring everyone under insurance cover by 2047. This means that after 23 years every person will have adequate life, health and property insurance. For this, the government will have to encourage people to buy insurance products. Tax benefits are available on some insurance products. But, it needs to be increased. Finance Minister Nirmala Sitharaman will present the Interim Budget on 1 February . Keeping in mind the plans of IRDAI, she can announce measures to increase people’s interest in buying insurance products.
Tax exemption on purchasing health insurance for the first time
To bring a large section of the population under the ambit of health insurance, the Finance Minister can announce tax exemption on purchasing medical insurance for the first time. The government can give 200 percent exemption on the premium amount. This can be reduced to the limit of deduction under section 80D in the next 3-4 years. Another solution could be for insurance companies to launch products that cover OPD expenses. The share of OPD expenditure in the total expenditure on treatment is 50-60 percent.
Separate tax exemption for youth
The government may announce a special exemption for people who are below 30 years of age and who use digital means to buy the policy. For this, the mortality protection gap can be reduced. The government may launch limit-based tax exemption, whereby if a taxpayer purchases a term insurance policy or annuity product or both with a pre-determined minimum cover limit, he may be given additional tax exemption on the premium paid on such policy under Chapter VIA. Could.
Measures to bring all vehicles under insurance
Despite third party insurance cover being mandatory, there are more than 50 percent of vehicles in the country that are not insured. There can be many reasons for not purchasing third party insurance cover. The government will have to take measures to encourage such people to buy third party cover. For this, they can be given the benefit of tax exemption once they renew their policy. Currently, there is no tax benefit of any kind on motor insurance.
Tax exemption on property insurance
Every year natural disasters like earthquakes, landslides and floods are seen. About 354 such incidents have been seen from 2001 to 2021. People have to suffer a lot due to this. In such a situation, the government can provide the facility of deduction on property insurance. For this, a limit of Rs 25,000 can be fixed for deduction. The government may direct the Real Estate Regulatory Authority to make home insurance mandatory.
Tax exemption on travel insurance
Last year, between January and December, about 22.5 lakh passengers faced problems like flight delays. 2.84 lakh passengers faced problems due to flight cancellation. Many types of losses are covered under travel insurance. This proves to be very effective in difficult situations. The government may announce tax exemption on travel insurance in the budget. This will encourage people to buy travel insurance.
Parimal Heda, Chief Investment Officer, Digit General Insurance
