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As the expectations build for Finance Minister Nirmala Sitharaman’s budget announcement, the Indian insurance sector is calling for tax benefits, technological advancements, and regulatory changes to make insurance more accessible and affordable for all.
Read the expectations from insurance sector in detail:
Parimal Heda, Chief Investment Officer, Go Digit General Insurance
The insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) has committed to enable “Insurance, for All” by 2047 and ensure every Indian citizen has appropriate and adequate life, health, and property insurance coverage. The upcoming Budget could play a vital role in supporting this reform agenda.
Given the rising healthcare expenses, it is essential that health insurance becomes more affordable to everyone. Providing tax benefits such as categorizing health insurance under the Goods and Services Tax (GST) framework with a reduced tax rate of 5% could reduce the overall premium outgo and encourage people to opt for comprehensive coverage.
Additionally, offering a tax deduction to first-time health insurance purchasers, especially the younger generation through a 200% tax exemption on the premium amount under Chapter VIA could motivate more individuals to secure insurance coverage. This tax advantage could be phased out gradually over four years to align with the tax benefits offered under Section 80D ensuring a smooth transition.
Almost half of the automobiles, on the roads in India do not have third-party motor insurance, which poses a risk to everyone driving and to the people on the roads. One way to promote the adoption of TP cover is by providing a one-time tax exemption to individuals who renew their expired TP policies within a specified timeframe.
Natural disasters are becoming more frequent and severe, and India is among the most disaster-prone countries in the world. To safeguard homeowners from such adverse calamities and to boost the penetration of home insurance, the government through the aid of RERA can make home insurance for newly purchased properties mandatory. The cost of home insurance premiums can also be made eligible for a tax deduction of up to Rs 25,000.
Rohan Malhotra, CEO, Roadzen
Our hope for the upcoming budget is centered on significantly deepening motor insurance penetration in India, with a special emphasis on tier 2 and tier 3 cities and beyond. At Roadzen, we see a tremendous opportunity to integrate advanced technologies like telematics to offer road safety-linked insurance discounts.
This approach not only encourages safer driving practices but also makes insurance more accessible and relevant to a wider audience. The introduction of the Managing General Agent model through regulation can further enhance this by ensuring better claims experiences and expertise in handling niche and long-term risks. These steps are essential for building a more inclusive and technologically adept insurance ecosystem in India.