Budget 2022: Income Tax Relief for Insurance Premiums Up to Rs 1 Lakh? Expert Opinions

Budget 2022: Income Tax Relief for Insurance Premiums Up to Rs 1 Lakh? Expert Opinions
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Nirmala Sitharaman, the finance minister of India, will present the Union Budget 2022 at the Parliament on February 1. Amid the rise in the cases of Covid, we can expect that the budget will focus on the healthcare sector, much like last year. 

Health insurance has been looked at as the utmost important thing to have due to rising hospitalization rates, while life insurance cover has come in handy as we have seen a rise in the number of deaths that took place over the last two years.

While the insurance providers have played a key role over the years, the rate of insurance penetration is low in India. To turn the tides, few changes are mandatory in the health insurance sector as Covid-19 seems to stay here for long.

Chief financial officer of Canara HSBC OBC Life Insurance, Tarun Rustagi, said that Insurance has appeared as the most vital tool to secure the family from financial uncertainty. The industry has pending expectations from the policymakers for asking people to get life insurance by giving a separate deduction limit of a minimum INR 1 lakh for insurance premium payment under Section 80C.

Rustagi commented on the need for reducing the GST on health insurance. However, policymakers should also consider discharging or lowering GST rates on life insurance products as these should come under the essential product category.

Niva Bupa CEO and MD Krishnan Ramachandran said that The 18 percent GST charged on health insurance products increases the premium amount. It further acts as a hindrance for many prospective policy buyers. Reducing GST will make the products reasonable for the masses and increase penetration across consumer segments.

Rakesh Jain, CEO of Reliance General Insurance Co. Ltd, said that bringing healthcare facilities under the ambit of infrastructure. It will lead to funding from large institutions, including insurance companies seeking regulatory obligation of investments in “Infrastructure assets”.

In conclusion, he said that the insurance and healthcare sector need to go forward together to boost access to quality and affordable healthcare to the masses.

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