Union Budget 2025: Every sector has big expectations from the Union Budget 2025. Finance Minister Nirmala Sitharaman will present the budget on 1 February 2025. That means, less than four weeks are left for the budget to be presented. The insurance sector has high hopes from the first full budget of the third term of the Modi government. The government’s focus is on providing insurance cover to as many people as possible. Like Corona, before the budget, due to the arrival of the new virus HMPV, the demand for insurance and health sector has increased more than before. This time Finance Minister Nirmala Sitharaman can make some important announcements in the budget.
Need to increase tax exemption
People’s biggest interest in buying a life insurance policy is for tax saving reasons. Currently, tax exemption up to Rs 1.5 lakh is available under Section 80C of the Income Tax Act. Things like PPF, children’s tuition fees are also included in this limit, due to which there is no space left for insurance. If separate provision of tax exemption is made for insurance, then more people will be motivated to buy term insurance. Term insurance is considered a good protection option with affordable premium rates.
GST rates on insurance sector should be reduced
Currently, 18% GST is levied on insurance policies, which makes them expensive. The insurance sector demands that it be reduced to 5%. This will reduce the premium and insurance will be cheaper than before. In such a situation, more people will be able to take insurance. There is a need to make rules for pension products like those for the National Pension System (NPS). Also, tax exemption should be given on annuity income, so that people are more motivated for retirement planning.
Insurance sector expectations
If the government makes insurance policies cheaper and tax-friendly, it will increase the reach of insurance in the country. Under IRDA’s Vision 2047, insurance cover is to be provided to every citizen. The sector expects such decisions from Budget 2025, which will help in achieving this goal. Now it remains to be seen what announcements the government will make in the budget for the insurance and health sectors. So that, common people especially the middle class can benefit.
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