The Honourable Union Finance Minister presented the above Budget in the Parliament on February 1 2023 with emphasis on the following seven features:
Reaching the last mile
Infrastructure & Investment
Unleasing the Potential
Youth Power and
Our main focus out of these seven areas is naturally on the last one- Financial Sector- although the all others too contribute their share in improving our insurance business and increasing insurance penetration.
For Taxpayers including Businessmen
No tax for salary up to Rs 7.5 lacs under the New Tax regime. Standard Deduction of Rs 50000 available and rebate limit increased to Rs 7 lacs from Rs 5 lacs. Number of slabs reduced from 7 to 5.
Maximum rate of surcharge under NTR cut to 25% from 37%. The highest effective tax rate now 39% from 42.7%. Only 5% tax on Individual’s Annual income of Rs 9 lacs only to pay Rs 45000 as tax. Salaried class and Pensioners have their Standard deduction increased.
Tax exemption limit for leave encashment on retirement for non-Government employees increased to Rs 25 lacs from Rs 3 lacs.
TDS on EPF withdrawal cut to 20% from 30% for those without PAN.
Deposit limit for Senior Citizens Savings Scheme doubled to Rs 30 lacs from Rs 15 lacs.
Deposit limit for Monthly Income Account Scheme for Senior Citizens also enhanced to Rs 9 lacs from Rs 4.5 lacs for Single Accounts and to Rs 15 lacs from Rs 9 lacs for Joint Accounts.
Mahila Samman Savings Certificate with 7.5% interest rate for Females. Up to Rs 2 lacs can be deposited until March 2025 for 2 years.
Benefit of 100% deduction of profits for Start-ups incorporated by March 31 2024 extended by one year.
Customs duty cut on goods/machinery for manufacture of lithium-ion cells used in Electric Vehicles.
Start-ups can carry forward business loss on change of shareholding for 10 years from the year of incorporation, up from 7 years earlier.
Customs duty cut on components may reduce domestic prices of phones/ TVs etc.
Where there are Gains, there are some Pains too
Income tax refund for a year can be withheld if scrutiny assessment of reassessment for any other year/years pending.
Capital Gains exemption on purchase of house now capped at Rs 10 crores.
Proceeds from life insurance policies to be taxable if aggregate premium for policies issued on or after April 1 2023 exceeds Rs 5 lacs annually. Proceeds received by heirs on death of the insured to remain exempt from tax.
Input tax credit restricted to GST paid by companies on CSR obligations.
Deductions for expenditure incurred on payments made to MSMEs to be allowed only after payment to suppliers.
Customs duty up on imitation jewellery, precious metal goods, electric kitchen chimney and vehicles including Electric vehicles.
There is a little disappointment that this Budget has not granted any increase in the amount to be saved under Section 80C nor any special treatment given to insurance premium under this Head as National Pension Scheme- NPS- has been given Rs 50000 for income tax purposes.
Our efforts to be increased in the following areas
Our Field Force has to sell a lot of policies of annualized premium of more than Rs 5 lacs up to 31-03-2023 so that the policyholders can get the benefit of Section 10 (10D) because after 1-4-2023 the customers shall not get this benefit even if the annualized premium is equal to or one tenth of the Sum Assured.
Our Agents should persuade the public to save the amount saved by the Gains of this Budget through life insurance policies for their different needs in the future especially the following sectors-
38800 Teachers to be employed in 3.5 lac Eklavya tribal schools.
50 New Airports and Heliports to be made.
Rs 75000 crores earmarked for 100 transport infra projects.
10000 bio input research centres to be set up.
30 Skill India International Centres to be set up.
Our sales people should now pay more attention on India’s Middle Class people who have received huge concessions and benefits in this Budget and transform this excess amount in their hands in to insurance policies.
As insurance people we have to grab whatever little benefit is given or a leeway is provided and convert the same to our advantage and enhance our new business potential.
I am sanguine that our agents will rise to the occasion in this last and most crucial quarter of the financial year.