R Doraiswamy, Managing Director of the Life Insurance Corporation of India (LIC), is expecting tax incentives for the insurance sector and subsidies for people below the poverty line to encourage insurance adoption and boost penetration in India.
“There needs to be some kind of nudge that people to go towards insurance. Some tax incentives, some push from the government like kind of a subsidy for people below the poverty line to take insurance,” Doraiswamy said on the sidelines of the Insurance & Reinsurance Conference 2025 while addressing Moneycontrol.
He added that the insurer would welcome any announcement that encourages people to engage in long-term savings through insurance.
On January 19, Moneycontrol reported that India’s insurance sector is anticipating key budget announcements, including tax incentives for policyholders, a reduction in Goods and Services Tax (GST), and the implementation of mandatory basic term life insurance coverage for formal employment.
Most insurance firms expect an increase in tax deduction limits for policyholders under section 80C for life insurance premiums and tax incentives for policyholders under section 80D.
Currently, an 18 percent GST is levied on premiums paid for life and health insurance policies.
Last month, the 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman in Jaisalmer, Rajasthan, had deferred the potential reduction in GST on premiums.
Even though the call on GST cut will be taken by the GST Council, experts believe that some announcement or clarity will be there in the upcoming Budget.
The Group of Ministers (GoM) requires more time to finalise inputs from insurance regulators regarding a potential reduction in GST on premiums.
Industry experts expect a cut in the GST rate on health insurance premiums in the Union Budget 2025 and to increase insurance penetration and ensure financial security for dependents a mandatory basic term life insurance.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.