The government has said only those life insurance policies that have an aggregate premium of Rs 5 lakh will be exempt from tax in the new fiscal.
“It is proposed to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above Rs 5 lakh, income from only those policies with aggregate premium up to Rs 5 lakh shall be exempt,” the Union Budget 2023-24 said.
This will not affect the tax exemption provided to the amount received on the death of the person insured. It will also not affect insurance policies issued till March 31, 2023, the annexure with the Budget document read.
Along with this, the government has also not heeded the industry demand to give sops to the industry including for health insurance for better penetration of insurance in the country.
Several insurance company CEOs who spoke to ETBFSI had sought sops including higher exemptions and a separate section for exemptions for insurance.