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Budget 2021: Government brings new schemes for social security, making insurance compulsory, expectations from budget

The insurance sector also has high expectations from Finance Minister Sitharaman in the budget.

Union Budget 2021-22 Expectations for Insurance Sector: Union Finance Minister Nirmala Sitharaman will present the budget for the financial year 2021-22 on 1 February. This will be the third budget of the second term of the Modi government. This budget has become very important due to Corona epidemic and subsequent economic crisis. All sectors have high expectations from the upcoming budget. Among these, the insurance sector also has high expectations from Finance Minister Sitharaman in the budget. This includes suggestions like making insurance compulsory, raising awareness about it and raising the tax exemption limit.

Steps to raise awareness

Neeraj Prakash, Managing Director, Shriram General Insurance said that taking any kind of insurance is still seen as an expense in our country rather than protection from a bad financial situation. To increase the reach of non-life insurance, the government can give more tax benefits. With this, new insurance schemes can be introduced and can include more products in the compulsory cover.

Increase in tax exemption limit

Neeraj Prakash said that at present, all life and health insurance policies are exempt under section 80C of the Income Tax Act. Under the section, there is a tax rebate of up to Rs 1,50,000 on individual investments. According to insurance companies, this is very low. The big problem in this is that the 80C includes many other products like ELSS, PPF, NSC SSC, SSSC etc. Hence policyholders get adequate benefits. The government may consider raising the limit for this under a separately exempted section or section 80C of the Income Tax Act, 1961, as the existing limit of Rs 1,50,000 is lower.

Dhirendra Mahyavanshi, co-founder, Turtlemint said that the limit of section 80D can be increased. He said, however, that the limit was raised to Rs 50,000 in the earlier budget. But it was only for senior citizens. In this budget, he hopes to increase it for the common people.

Dhirendra Mahyavanshi has also said to include pension plans in section 80CCD. According to him, the NPS scheme gets an additional deduction of Rs 50,000 under section 80CCD (1B). This has affected the popularity of life insurance plans which are included only in section 80C, under which benefits of up to Rs 1.5 lakh are available. They hope that deduction will also be available on life insurance pension plans under section 80CCD (1B), which will increase their popularity.

Union Budget 2021: Will Tax Deduction Limit Under Section 80C? Common people will get relief from these announcements

New Scheme for Social Security

According to Neeraj Prakash, health insurance scheme can be launched for senior citizens, in which health or medical insurance can be provided to citizens above 60 years of age. These people are most in need of medical facilities.

Make insurance mandatory

Neeraj Prakash said that all properties should be compulsorily insured under the law. An income tax benefit should be introduced in the Union Budget 2021, in which the premium paid for house property insurance is exempt. This will increase the penetration of insurance. This would also ensure that people get a claim in the event of a natural disaster. People’s interest has increased in the era of the epidemic. Health and home insurance can be made mandatory in this budget.

Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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