Insurance likely to get further sops in Budget
A plan to carve out a special window for investments in insurance alone is under consideration. Currently, insurance is only one of the many options for availing of the benefit under Section 80C. An announcement is likely in Budget 2013-14.
Finance minister P Chidambaram has been vocal about the need to push savings in financial form rather than in ‘unproductive’ assets like gold. The spurt in import of gold has aggravated the nation’s current account deficit.
Currently, Section 80C allows deduction of payments on life insurance premia, LIC annuity plans, subscription to certain mutual funds, pension funds and notified government securities, tuition fee and repayment of loans taken for the purchase of residential property. Premia paid on insurance products cannot exceed 10% of the capital sum assured for the purpose of deduction from April 1, 2013, onwards, as per an amendment to the law made last year.
About half of the country’s domestic savings are in financial assets, while the rest are in land holdings and other assets such as gold.
Chidambaram had asked his officials if
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