Leading insurers SBI Life, HDFC Life, Bajaj Finserv rise 3% as Investec sees no setback in new tax bill

Shares of leading private life insurers saw strong gains on February 12, after an Investec note said the new Income Tax Bill - to be tabled on Thursday - will not change the preferential corporate tax rate for the sector.

Brokerage Investec said that the new tax bill is not expected to change the preferential tax rates that apply to life insurance companies, instead keeping a status-quo, thus removing a major overhang for the sector.

The Corporate Tax that life insurers are required to pay is much lower than what businesses in other sectors pay. Equity analysts had expressed concern over whether the new Income Tax Bill would change this provision for life insurance companies, as it may have a negative impact of the tax liability.

Bajaj Finserv, which provides both life and general insurance, was the top gainer on Sensex and Nifty 50, rising nearly 3 percent to close at 1,792 apiece. The stock was a strong contributor to the day's gain on the index.