Tax: Finance Minister Nirmala Sitharaman announced this change in income tax rules while presenting the Union Budget 2023 in Parliament. However, the Finance Minister made it clear that the death benefit on such premium will continue to be tax exempt from the new income tax rules. He also announced that the new income tax rules will not apply to ULIPs.
Life Insurance: Modi government 2.0 presented its last full budget on February 1 this year. During this, Finance Minister Nirmala Sitharaman made several important announcements. Nirmala Sitharaman also made an important announcement for the people who got insurance in these announcements. The Finance Minister said that the income from life insurance premium in excess of the annual premium of Rs 5 lakh will be taxable from the new financial year i.e. from April 1, 2023.
Budget 2023
Finance Minister Nirmala Sitharaman announced this change in income tax rules while presenting the Union Budget 2023 in Parliament. However, the Finance Minister made it clear that the death benefit on such premium will continue to be tax exempt from the new income tax rules. He also announced that the new income tax rules will not apply to ULIPs (Unit Linked Insurance Plans).
Insurance
Nirmala Sitharaman, while delivering the budget speech in Parliament, said that for life insurance policies (other than ULIPs) issued on or after April 1, 2023, where the aggregate premium exceeds Rs 5 lakh, only those with aggregate premium up to Rs 5 lakh The income generated by the policy will be exempted. This will not affect the tax exemption provided to the amount received on the death of the life assured. It will also not affect insurance policies issued till March 31, 2023.
Finance Minister Nirmala Sitharaman
In this budget, Finance Minister Nirmala Sitharaman has now covered other life insurance products by levying income tax on the insurance benefits coming on the annual premium above the limit of Rs 5 lakh. However, the limit for ULIP has been kept at Rs 2.5 lakh per year. In such a situation, once this budget proposal is implemented on life insurance, tax exemption will be available on LIP benefit on annual premium up to Rs 2.5 lakh, while tax exemption will be available on life insurance benefit on premium up to Rs 5 lakh per year.
