Budget 2020: Insurers bid for hike in tax exemption to increase sales, says report

As a measure to boost sales, the insurance industry is seeking an increase in tax exemption for specific policies brought in by the customers, according to a moneycontrol.com report.

Presently, only the National Pension System (NPS) has the provision of tax exemption for their products, along with a separate Rs 50,000 incentive in income tax.

Life insurers, in particular, require a separate tax exemption limit for pension and term products, the report said.

According to Vibha Padalkar, MD and CEO, HDFC Life Insurance, quoted in the report, there should be incentives for the pension products sold by insurance companies in the budget.

"There could either be a separate carve-out for the pension sector or a decision could be taken on annuities. This will give a fillip to the average Indian," Padalkar told moneycontrol.com.

In the report, Kamlesh Rao, MD & CEO, Aditya Birla Sun Life Insurance, said that in a country with inadequate social security, protection offered by life insurance is inevitable. However, a lack of penetration is plaguing the industry, he said.