Breaking News: Changes to Life Insurance Policies Taxation in India
The government has announced changes to the taxation of life insurance policies in India, as part of the FY24 budget. Starting April 1, all life insurance policies with an annual premium of above INR 5 lakh, excluding unit-linked insurance plans (ULIPs), will be taxable. This change will only apply to new policies, and not to existing ones.
This move effectively means that traditional insurance plans will lose their tax-free advantage if the premium is above INR 5 lakh. The announcement has caused a significant drop in shares of major life insurance companies in India.
HDFC Life Insurance saw a decline of 12% to INR 510.30, SBI Life Insurance fell 9% to INR 1,119, and the country’s largest life insurer, Life Insurance Corporation of India, decreased by 5% to INR 618.40. Max Financial saw a drop of 10% to INR 752.10, and PB Fintech declined 7% to INR 397.25.
This change to life insurance policies taxation is a significant shift in policy and will have a significant impact on the industry. Stay tuned for more updates on the developments in this matter.
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