Budget 2023-23 has proposed that income from traditional insurance policies where the annual premium is over Rs 5 lakh will no longer be exempt from tax.
The government’s removal of tax-free status for income from insurance policies with premiums above Rs 5 lakh is about taxing large investments under such policies, not the insurance itself, revenue secretary Sanjay Malhotra has said.
“Let me clarify that it is not about insurance… the tax exemption being withdrawn is on investments,” Sanjay Malhotra told CNBC-TV18 during a post-budget event on February 2.
“It is only the investments beyond a particular point where it no longer actually remains insurance but it becomes more of an investment rather than insurance, that we have removed the exemption and I think rightly so.” Pure-term insurance is totally exempt and continues to be so, the official said.
Budget 2023-23 has proposed that income from traditional insurance policies where the premium is over Rs 5 lakh will no longer be exempt from taxes.
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