Life Insurance Council will meet the Central Board of Direct Taxes (CBDT) officials next week to seek clarification on whether the final pay-out from unit-linked plans will be taxed or not.
?There is lack of clarity on the issue. We still do not know whether the final payout of unit-linked policies will be taxed or not,? said SB Mathur, secretary general of the Life Insurance council.
He was here to attend a seminar on insurance organised by the Life Insurance Council.
Industry insiders feel that according to the revised discussion paper on the direct tax code (DTC) approved pure life insurance products and annuity schemes will be subject to EET method of tax treatment.
The second draft of the DTC proposed to treat all new Ulips on EET basis, while the pure insurance and annuity products are treated on exempt-exempt-exempt (EEE) basis at present.
Meanwhile, the industry thinks that bundling of life coverage with pension plans will have impact on the business initially. ?We have asked Irda to allow insurance companies to design separate plans for people above 50 years of age. The companies may look for riders like medical insurance,? Mathur said. “The new norm should be applicable to a lower age, ” he added.
The life insurance industry has collected a total premium of Rs 2,61,025 crore for 2009-10 against a collection of Rs 2,21,791 crore in 2008-09, registering a growth 18%. ?We expect to grow at the same rate this year too. Total premium collection for the year should be between Rs 2,95,000 crore and Rs 3,08,000 crore.