‘Pension ought to be made tax free’

Chennai, Dec 12 The Indian authorities ought to make pensions tax free in order that the pension penetration is greater, says a high insurance coverage business official.

Ageas Federal Life Insurance coverage CEO and MD Vighnesh Shahane additionally stated the federal government also needs to make the maturity quantity underneath unit linked insurance coverage insurance policies (ULIP), the place the annual premium is Rs 2.5 lakh or extra, tax free.

“To extend the penetration of pension and to make India a pension society, particularly since we haven’t any social safety cowl, our request is to make pensions tax-free within the arms of the client as a result of the pension premium is already paid by means of taxable revenue,” he stated.

The proceeds of the pension/annuity ought to be made tax-free within the arms of the client or to permit deduction for the principal part, he added.

Itemizing out different price range want checklist, Shahane stated there ought to be a better deduction restrict within the case of medical insurance premium underneath Part 80D of the Revenue Tax Act whereas the present restrict is barely Rs 25,000.

He stated the Part 80C of the Revenue Tax Act is cluttered with numerous funding choices for tax advantages, and there ought to be a separate part for all times insurance coverage or the restrict be elevated from Rs 1.5 lakh to Rs 2.5 lakh.

No less than a separate part for time period life insurance coverage insurance policies can be useful given the massive safety hole within the nation, Shahane added.

“We suggest zero-rated GST for cover merchandise as 18 per cent GST mak es the time period plans costlier. To extend insurance coverage penetration within the nation, the fundamental safety plans ought to be made obtainable underneath zero-rated GST,” he stated.

Elevating the tax deducted at supply (TDS) exemption restrict on insurance coverage fee (underneath part 194 D of the Revenue Tax Act) from the present stage of Rs 15,000 would supply a larger impetus to insurance coverage brokers, Shahane added.