Union Budget 2022: Tax Exemption for Those Who Buy Home Insurance

The new Union Budget 2022 could provide tax exemptions for Home Insurance purchases as well

Insurers think it is now more important than ever to offer the much-needed boost to the insurance business in order to continue protecting both the economy and society from unanticipated hazards.

The dynamic health environment has accelerated the demand for health insurance in India. In today’s world, insurance has become a need in order to be effectively covered against unforeseen events.

As a result, insurers think it is even more critical to offer the much-needed boost to the insurance business in the shape of the following steps in order to continue protecting both the economy and society from unanticipated risks:

1) On the direct tax front, the government should exclude consumers who purchase house insurance from paying taxes. As a result, “giving them with much-needed incentive, particularly in light of growing natural tragedies that leave people stuck.” This might be accomplished by creating a distinct maximum in addition to the current savings-oriented 80C limit,” says Tapan Singhel, MD & CEO of Bajaj Allianz General Insurance.

2) On the indirect tax front, given India’s low insurance penetration and the fact that insurance is meant to offer financial assistance in the event of a sudden human or economic loss, there is a direct need for the government to cut the GST rates on insurance premiums.

3) Parametric Insurance (an index-based plan) should be implemented, which indemnifies the insured for losses incurred as a result of catastrophic catastrophes. The premium may be collected in conjunction with the property tax, and when a claim is made, the claim money is instantly deposited to the insured’s Jan Dhan Account, which is connected to their house insurance policy.

4) The government should adopt a universal health insurance programme similar to the one implemented in Jammu and Kashmir throughout all Indian states/UTs, covering all people of the area rather than just a few.

5) Since the implementation of GST, the business has received several correspondences from various state agencies requesting information on particular concerns. “As a consequence, big units have administrative challenges when responding to different authorities on the same concerns.” “This may be avoided if a ‘Common Assessment Authority’ is formed for enterprises with a pan-India presence and a revenue that exceeds the stipulated threshold level,” Singhel argues.

Also Read: What exactly is the necessity of insurance?

6) Because Covid has emphasised the significance of protection and savings, the budget should include further tax breaks for protection and retirement items.

7) Because the recovery in private spending is still lagging below pre-pandemic levels, some budgetary help for private consumption, particularly in the automobile and durable categories, may be offered.

“In general, as a result of the Covid effect, budgetary deficits have increased, and the government will need to work on a plan to return deficits to pre-Covid levels.” “I believe that these few remedies will go a long way toward boosting Indians’ life expectancy and bolstering our country’s financial and economic stability,” Singhel adds.

Union Budget 2022

The Insurance Industry could successfully receive a boost if the Government agrees to these reasons which have severely impacted the Insurance Businesses.