Insurers seek exemption on service tax, long-term saving instruments sop

Additional stand alone tax exemption limits for insurance premiums and taxation only on profit in shareholders P&L are some of the demands put forth by the life insurance industry in the ensuing Union Budget.

Written by R Ravichandran

February 22, 2011 01:24 IST

With the importance of life insurance increasing it has become necessary to revisit the above limit under Section 80C. It is suggested that a standalone additional exemption limit of Rs 50,000 (over and above the already existing limit of Rs 100,000) be specified for insurance premiums alone under the Act. This in addition to offering tax benefits to the individual would also better ensure insurance penetration. The Exempt, Exempt, Exempt (EEE) regime to continue for life insurance companies, said Anuj Mathur, chief financial officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited.

Rajesh Sud, MD & CEO, Max New York Life Insurance, said that the proposed DTC provides deduction of Rs 50,000 for life cover, health cover and tuition fees. Life insurance products may see a downside as amount of Rs 50,000 may be exhausted for paying tuition fee alone for kids. It is suggested that the limit should be increased and should be wholly and exclusively for life insurance products to a minimum of Rs 1.5 lakh.

This article was first uploaded on February twenty-two, twenty eleven, at twenty-four minutes past one in the night.