It’s a growth-oriented budget in challenging times. Hiking of FDI limit in insurance to 74% will lead to increased capital inflows and boost growth potential.
Tax exemption for maturity proceeds for ULIPs under section 10(10D) for annual premiums up to INR 2.5 Lakh continues. For annual premiums over INR 2.5 Lakh for ULIPs, death benefit continues to be tax exempt. For annual premium above INR 2.5 Lakh for ULIPs, the maturity benefit will now be taxed as Capital Gains. Thus, the budget endeavours to selectively bring in taxation parity between Life Insurance companies and Mutual Funds.
No changes in the Direct tax regime has led to stability in the tax environment and gives us confidence that the economy is on the cusp of a recovery.
Listing of Life Insurance Corporation (LIC) and disinvestment of 2 PSU Banks and one public sector General Insurance Company is a welcome move.
(The author is Deputy CEO, is IndiaFirst Life Insurance Company Limited)
(Published 02 February 2021, 16:55 IST)
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