Mumbai: The Rs 70,000-crore general insurance industry has demanded tax exemption in the forthcoming Budget to give boost to corporate health plans of SME employees and retail catastrophe cover.
"The industry also wants some kind of benefits for personal line insurance too, which includes personal accident cover and householder's insurance," R Chandrasekhran, the secretary general of the General Insurance Council (GIC), which is the official representative body of the general insurance industry, said.
A top delegation led by the GCI had met financial services secretary GS Sandhu in Delhi recently to discuss a range of industry issues with in the run-up to the Budget that will be presented early next month, he added.
The GIC explained to the ministry that at present there are some tax exemptions available to the retail health insurance customers separately. If they take cover for themselves and for their parents, still it is not sufficient as medical inflation has shot up.
The non-life insurers have raised a demand for raising the limit of income tax rebate under section 80D for providing health cover. Currently, there is a ceiling of Rs 15,000 per annum.
"We have urged that this limit must be increased to Rs 50,000, considering the need for an increase for health cover for common citizen and their families," Chandrasekhran said.
The idea is to increase the penetration of non-life insurance," he said, adding that the share of non-life insurance to the GDP is a mere 0.80 percent now.
The council has also proposed to provide tax exemption to the buyers of 'catastrophe cover' as it will encourage people to buy such covers where insurance industry can bear the losses in case of catastrophe.
Right now government is almost paying from tax payers' money for any losses out of natural disasters as people are not accustomed to buy such cover.
"Almost 85 percent of the catastrophic losses in the country are uninsured. If through tax exemptions such covers can be encouraged, it will reduce the burden on the public coffers and help develop the general insurance industry.
"We have suggested a minimum amount of catastrophe cover be made mandatory and the same should be eligible for tax exemption," Chandrasekhran said.
