Union Budget 2024: Insurance Sector Demands Hike In Deduction Limit For Health Insurance Premiums

Although dates have not been announced officially, reports have said that FM Sitharaman could present the Union Budget on July 24.

New Delhi: Ahead of the presentation of the Union Budget 2024, by Finance Minister Nirmala Sitharaman, voices are growing stronger for allocating higher budget for the insurance sector and hike in deduction limit for health insurance premiums.

Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance Company said that the insurance sector anticipates the upcoming union budget to address several critical areas essential for economic growth and public welfare. 

"We welcome the prospect of higher budgetary allocations to the insurance sector, which will enhance our ability to provide comprehensive coverage and innovative solutions to a broader segment of the population in achieving the Insurance for All mission of IRDAI," said Dhanawat. 

In light of rising healthcare costs, we expect an increase in the deduction limit for health insurance premiums, as it will offer greater financial relief to policyholders, added Dhanawat. 

Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance said the finance ministry must consider lowering GST on life insurance products. Additionally, in the pension products category, with the objective of securing post-retirement financial needs of the individuals. He urged the government to align life insurance annuity or pension products with the National Pension Scheme (NPS) and allow the similar additional deduction of Rs 50,000 or more for life insurance annuity or pension products under Income Tax.

"We also request the ministry to introduce Long Term Capital Gain taxability for all high value traditional life insurance plans (more than Rs.5 lakhs aggregate annual premium), in line with high value ULIPs. This will bring in uniformity and tax efficiency for insurance customers at par with other similar financial products in the market,” Chugh added.

He said, reducing the GST on health insurance policies will make these essential products more affordable and accessible.

Although there has bee no official announcement regarding the presentation of the Union Budget 2024, media reports have said that Finance Minister might table it on July 24. 

As per a report in the Financial Express, the FM could present the Full Budget on July 24 while the Economic Survey will be tabled a day ahead on July 23.