The introduction of a clause pertaining to non-deductible expenses in Section 37 for life insurance companies may lead to tax litigation. The proposed hike in Capital Gain Tax is expected to impact the tax liabilities for ULIP policyholders
Rushabh Gandhi, MD & CEO, IndiaFirst Life
The decrease in TDS rate from 5 per cent to 2 per cent on life insurance policy payouts, as announced in the Budget 2024, is anticipated to boost customers’ liquidity, which is a welcome move.
The introduction of a clause pertaining to non-deductible expenses in Section 37 for life insurance companies in the budget may lead to tax litigation. The proposed hike in Capital Gain Tax also is expected to impact the tax liabilities for ULIP policyholders.
However, the ULIP holders purchasing policies with premium of less than 2.5 lakh per annum can continue to avail benefits under Section 10 (10D) and are not liable to pay any tax on maturity.
By raising the standard deduction and adjusting tax slabs, taxpayers under the new regime will face lower tax burdens, thus improving their disposable income, which bodes well for consumer spending, said Gandhi.
Shailaja Lall, Partner, Insurance & Reinsurance, Shardul Amarchand Mangaldas & Co
The reduction in TDS rates from 5 per cent to 2 per cent is a welcome change, as policyholders especially in life insurance will be subject to lower rates of TDS.
Apart from policyholders, insurance distributors such as insurance agents and insurance brokers will also enjoy greater cash flow with the reduction of TDS rates on payment of commission to them.
Prashant Tripathy, MD & CEO, Max Life Insurance
The Finance Minister(FM) has today announced a progressive budget, laying the roadmap to pursue nine priorities bringing significant advantages for our policyholders and the broader community. This budget reflects a forward-looking approach to promote personal finance and retirement planning.
The increased standard deduction in the New Tax Regime from Rs 50,000 to Rs 75,000 translates to substantial savings for taxpayers, with an additional Rs 17,500 in their pockets. Furthermore, the raised deduction on family pension from Rs 15,000 to Rs 25,000 provides much-needed relief to pensioners, ensuring they can manage their post-retirement lives with greater ease.
Additionally, the introduction of the NPS Vatsalya is a commendable initiative, allowing parents to start saving for their minor children’s future today. Moreover, the enhancement of the NPS contribution limit for employers in the private sector is a significant step towards promoting retirement savings.
Tarun Chugh, MD & CEO, Bajaj Allianz Life
The FM has secured a few critical aspects for the future readiness of the country in terms of strengthening the start-ups eco-system, focus on new age technology, space tech and encouraging clean tech.
There was a significant focus on sectors like agriculture, infrastructure at large as well as developing skills and generating employment, which will have a positive compounding effect on the economy going forward.
Furthermore, the reduction in the fiscal deficit target to 4.9% for FY25, down from the 5.1% estimated earlier in February 2024 (interim budget) paves the way for increasing fiscal discipline and enabling sustainable economic growth. This will positively impact India Inc. especially the insurance segment as we believe it will enable many more customers save and invest adequately in our financial instruments to secure their future.”
Suresh Agarwal, Managing Director & Chief Executive Officer, Kotak Mahindra General Insurance Company
“The hon’ble FM has focused on driving the Viksit Bharat agenda and thereby driving momentum for continued economic growth in this budget through a slew of measures announced. Fiscal deficit of 4.9 per cent versus 5.1 per cent in the interim budget puts the confidence back in the economy.
The focus on youth, employment generation and skilling will make sure that India will have a deployable and earning workforce that will accelerate us as a top global economy. Focus is also on developing agriculture productivity and resilience. The measures taken on the direct taxes aims for simplification and increases the disposable income for a vast majority of Indians, which will further boost the economy.
Krishnan Ramachandran, MD & CEO, Niva Bupa Health Insurance
“This budget has a forward-looking approach which aligns with government’s vision to build a ‘Viksit Bhart’. The strategic measures outlined in the budget, particularly those enhancing healthcare affordability and accessibility, reinforces our confidence in India’s potential and inspires us to be an integral part of this transformative journey.
The welcome move to fully exempt three life-saving medicines used for cancer treatment from custom duties will provide much needed relief to cancer-stricken patients and their families. Additionally, the proposed changes in the Basic Customs Duty (BCD) on X-Ray tubes and flat panel detectors with encourage local manufacturers.