Insurance industry seeks hike in tax exemption limit

New Delhi: Government should raise tax exemption limit for health insurance and introduce fiscal measures to help increase its penetration, say industry officials.

The suggestions forms part of insurance sector wish-list for the Budget 2016-17 to be presented in Parliament on February 29.

"There is an impending need for further tax exemption as health insurance is still not adopted as a necessity for one's self and family.

"Further exemption will encourage people to get a health insurance policy with extended covers which is a necessity in today's time given the current medical inflation in the country", Future Generali India Insurance MD & CEO K G Krishnamoorthy Rao told PTI.

In the Union Budget 2015-16, government had increased the limit for income tax exemption for health insurance.

Rao said it helped the company see fair increase in number of people opting for policies with up to Rs 10 lakh cover.

Tata AIG General Insurance Chief Financial Officer Miranjit Mukherjee said the recent catastrophes and sufferings faced by people has highlighted that families in India are inadequately insured specially for their homes/dwellings.

"Hope government encourages families through fiscal measures to adequately insure their homes, which would ensure that families remain protected and also increase penetration of general insurance business in India", Mukherjee said.

Besides, he said, government must fast-track the Universal Health Schemes and spread it to as many states as possible.

"The government must put a road-map for introduction of the Goods and Services Tax (GST) so that there is clarity on the date on which GST would come in place", he said.

FundsIndia's Mutual Fund Research Head Vidya Bala said key bills like GST and land need fast approval to pep-up the overall business sentiment, adding there are steady changes happening at the ground level.

The impact of various reform initiatives is widely expected to be seen in the next two financial year 2016-18 will then encourage private companies to spend their capital," she said.