Budget 2021 Expectation: Tax relaxations, incentives to enhance insurance penetration

Union Budget 2021, Budget 2020-21 Expectations for Insurance Industry, tax incentive, tax relaxation, income tax benefit u/s 80C, GST, Life Insurance, Health Insurance, Fire Insurance, Motor Insurance, Home InsuranceExcept necessary insurance coverage – like Motor Insurance – penetration of different insurances may be very much less in India.

Budget 2020-21 Expectations for Insurance Industry: To scale back farmers’ misery, the federal government is aggressively highlighting the significance of Farm Insurance, and the adaptability of Life and Health Insurance can be growing due to enhance within the consciousness stage, however the demand for different insurance coverage merchandise – like Fire Insurance, Home Insurance and so forth – is negligible.

Due to non-transfer of dangers, homeowners usually face main losses and monetary misery after the incidence of such insurable occasions.

“Insurance is an important social security tool which is closely linked to our economy. Right from insuring the backbone of our economy i.e. the farmers through crop insurance to taking care of new age risks like cyber threats through cyber insurance, insurance is there to safeguard most of the risks we face today. Hence, I believe it becomes even more crucial to provide a much needed boost to the industry in the form of below measures to continue safeguarding both the economy and the society against unforeseen risks,” stated Comment on behalf of Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.

Except necessary insurance coverage – like Motor Insurance – penetration of different insurances may be very much less in India. To enhance the penetration stage, the insurance coverage trade gamers need the federal government to present some tax relaxations and incentives.

“On the direct tax front for individuals, I feel the government should provide tax exemption to people opting for home insurance. Thus, providing them with much-needed motivation especially in the light of increasing natural calamities which leave people stranded. This may be done by providing a separate limit over and above the already savings biased 80C limit,” stated Singhel.

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While most lenders drive the debtors to insure the property – immovable or movable – bought on mortgage for monetary safety, relaxations in taxes could make folks take insurances voluntarily.

“On the indirect tax piece, there is a direct need for the government to reduce the GST rates on insurance premiums given the low insurance penetration in India and the fact that insurance is intended to provide financial support against any sudden human or economic loss,” stated Singhel.

“The above measures I believe will go a long way in not only making the insurance industry more favorable, but also lead to increase in penetration of insurance with appropriate support from all the stakeholders,” he added.

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