From TR Ramachandran- MD and CEO, Aviva Life Insurance:
Expectations from the Budget by the New Government
Tax incentive for long term savings
We would recommend a separate limit for deductions under Section 80C for long-term saving instruments like life insurance. Currently the Rs 1 lakh deduction under Section 80C also includes short-term saving instruments like some Mutual Funds and Fixed Deposits. Life Insurance and Pensions are the only segments of financial services that address the needs of individuals in the long-term. Hence, the Government should look at encouraging people to save for long-term by providing a separate limit for long-term savings.
Carry forward of losses for long-term gestation business
Insurance business is a long-term gestation business. Currently, we are allowed to carry forward losses for only 8 years. Most insurers do not make profit even in the 10th year. Hence, we recommend that the period for carry forward of losses is increased to 12 years.
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