Union Budget 2025: Every sector has high expectations from Union Budget 2025. Finance Minister Nirmala Sitharaman will present the budget on 1 February 2025. That is, less than four weeks are left for the budget to be presented. The insurance sector has high expectations from the first full budget of the third term of the Modi government
Union Budget 2025: Every sector has high expectations from the Union Budget 2025. Finance Minister Nirmala Sitharaman will present the budget on February 1, 2025. That is, less than four weeks are left for the budget to be presented. The insurance sector has high hopes from the first full budget of the third term of the Modi government. The government’s focus is on providing insurance cover to as many people as possible. With the arrival of a new virus HMPV like Corona before the budget, the demand for the insurance and health sector has increased more than before. This time Finance Minister Nirmala Sitharaman can make some important announcements in the budget.
Need to increase tax exemption
People are most interested in buying a life insurance policy for reasons of saving tax. Currently, tax exemption of up to Rs 1.5 lakh is available under Section 80C of the Income Tax Act. This limit also includes things like PPF, children’s tuition fees, which leaves no room for insurance. If a separate tax exemption is provided for insurance, more people will be motivated to buy term insurance. Term insurance is considered a good protection option with affordable premium rates.
GST rates on insurance sector should be reduced
Currently 18% GST is levied on insurance policies, which makes them expensive. The insurance sector demands that it be reduced to 5%. This will reduce the premium and insurance will be cheaper than before. In such a situation, more people will be able to take insurance. There is a need to make such rules for pension products, like there are for the National Pension System (NPS). Also, tax exemption should be given on annuity income, so that people are more motivated for retirement planning.
Expectations of the insurance sector
If the government makes insurance policies cheaper and tax-friendly, then it will increase the reach of insurance in the country. Under IRDA’s Vision 2047, every citizen has to be given insurance cover. The sector is expecting such decisions from Budget 2025, which will help in achieving this goal. Now it has to be seen what announcements the government will make in the budget for the insurance and health sector. So that, common people, especially the middle class, can benefit.
