Union Budget 2023: Union Finance Minister Nirmala Sitharaman presented the new general budget in the Lok Sabha today. Many changes were made in the budget this time too, in which a major change is related to the insurance sector.
Finance Minister Nirmala Sitharaman (FM Nirmala Sitharaman) presented the Union Budget 2023-24 on Wednesday. According to the budget announcement, from April 1, 2023, tax will have to be paid on the maturity amount received from insurance policies, if the total insurance premium is more than five lakh rupees annually. These do not include Unit Linked Insurance Plans (ULIPs).
Presenting the general budget, the Finance Minister said that if the total premium for insurance policies (excluding ULIPs) issued on or after April 1 is more than Rs 5 lakh, then only those policies whose premium is up to Rs 5 lakh will be deducted. It is proposed to make a provision for exemption on the income of Rs.
This will not affect the tax exemption given on the amount received at the time of death of the life assured. That is, the amount received by the nominee on death will be completely tax-free. Also, it will not affect insurance policies issued till March 31, 2023.
Certified financial planner Nidhi Manchanda, Head of Training, Research and Development, Fintoo, said that imposing tax on the maturity amount of life insurance policy is one of the biggest shocks of this budget. He said, “If a person has more than one life insurance policy, which has been issued on or after April 1, 2023. In this case, the maturity amount will be taxed if the total amount of premium of such policies exceeds Rs 5 lakh.” .”
Sarbveer Singh, President and CEO, Policybazaar.com, said that in Budget 2023, it is commendable that the Finance Minister has focused on Ease of Business in his announcements. Everything in the insurance industry rests on the delicate bond of trust of the customer. Simplified KYC procedures, DigiLocker services and increased move towards digital transactions will help in improving the customer experience. After which the acceptance of insurance will increase in India, as well as our economy will also expand.
According to the budget proposal, the maturity amount of all those life insurance policies (except Unit Linked Insurance Policy i.e. ULIP) issued after April 1, 2023, whose annual premium is more than five lakh rupees, will now be taxed.
The effect of this announcement made in the budget was also seen in the stock market and there was a big fall in the stocks related to the life insurance sector. Post-Budget, shares of HDFC Life Insurance fell 11 per cent and SBI Life Insurance fell 10 per cent.
