Life insurance stocks sold off heavily after the Union <keyword id="6358021" type="General" weightage="80" keywordseo="budget" source="Orion">Budget</keyword> pushed for a <keyword id="548629" type="General" weightage="100" keywordseo="new-tax-regime" source="Orion">new tax regime</keyword> and curtailed tax benefits on high-value insurance policies. On BSE, LIC was down more than 8 per cent, HDFC Life was down more than 10 per cent, Max Financial was down more than 9 per cent, SBI Life Insurance was down more than 9 per cent while ICICI Prudential Life Insurance was down more than 10 per cent. Vinod Nair, Head of Research at Geojit Financial Services said life insurance players witnessed heavy selling as the Budget pushed for the new tax regime, making insurance products less appealing as a tax-saving tool. Insurance policies where the premium is over Rs 5 lakh will no longer be tax-exempt, as per the provisions in Union Budget 2023-24. Kapil <keyword id="6371425" type="General" weightage="80" keywordseo="mehta" source="Orion">Mehta</keyword>, Co-founder, SecureNow Insurance Broker said the income from traditional insurances where the premium is over Rs 5 lakh will not be tax exempt. While this will dampen the interest of individuals to buy high-value traditional insurance, it will increase the focus on term plans and pure risk covers which is good. A concern is that it should not result in a significant shift towards purely investment-oriented unit link insurances, Mehta said. Arihant <keyword id="4615937" type="General" weightage="80" keywordseo="bardia" source="Orion">Bardia</keyword>, CIO and Co-Founder, Valtrust said if the premium paid on insurance policies (excl. ULIP) exceeds Rs 5 lakh in a year, then the proceeds from those policies will be taxable (except in case of death benefit). Bardia said this is negative for insurance -- as it will impact savings products which are usually high-value and margin products (though not protection). However, smaller policies remain unaffected. Overall a negative for insurance companies as it will impact the high-value premium policies -- thus impacting overall industry GWP growth. The New Tax Regime (<keyword id="6354892" type="General" weightage="80" keywordseo="ntr" source="Orion">NTR</keyword>) will now be considered as a default regime but it may not necessarily be a better regime for all taxpayers, experts said. Preeti Sharma, Partner - Tax and Regulatory Services, BDO India said the Finance Minister has taken conscious efforts to make the New Tax Regime (NTR) more attractive for the taxpayers. "The NTR shall now be considered as a default regime for all taxpayers but that does not necessarily mean a better regime for all. Taxpayers still need to look at their personal situation, various investments and expenditures that are eligible for tax exemption under the old regime and then decide which regime is better for them," Sharma said. Although the NTR is the default regime, an individual still has the option to opt for the old regime if the same is more beneficial in terms of tax outflow, Sharma SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/budget-will-fulfil-dreams-of-aspirational-society-farmers-and-middle-class-pm-modi/articleshow/97522670.cms">Budget will fulfil dreams of aspirational society, farmers and middle class: PM Modi</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/new-tax-regime-may-not-be-necessarily-beneficial-for-all-taxpayers-experts/articleshow/97525154.cms">New tax regime may not be necessarily beneficial for all taxpayers: Experts</a>

Life insurance stocks fall up to 10% after Budget pushes for new tax regime

Insurance policies where the premium is over Rs 5 lakh will no longer be tax-exempt, as per the provisions in the Union Budget 2023-24. Kapil <keyword id="6371425" type="General" weightage="80" keywordseo="mehta" source="Orion">Mehta</keyword>, Co-founder, SecureNow Insurance Broker said the income from traditional insurance where the premium is over Rs 5 lakh will not be tax exempt. While this will dampen the interest of individuals to buy high-value traditional insurance, it will increase the focus on term plans and pure risk covers which is good. A concern is that it should not result in a significant shift towards purely investment-oriented unit link insurances, Mehta said. Arihant <keyword id="4615937" type="General" weightage="80" keywordseo="bardia" source="Orion">Bardia</keyword>, CIO and Co-Founder, <keyword id="16321222" type="General" weightage="50" keywordseo="valtrust" source="Orion">Valtrust</keyword> said if the premium paid on insurance policies (excl. <keyword id="44600" type="General" weightage="50" keywordseo="ulip" source="Orion">ULIP</keyword>) exceeds Rs 5 lakh in a year, then the proceeds from those policies will be taxable (except in case of death benefit). Bardia said this is negative for insurance - as it will impact savings products which are usually high-value and margin products (though not protection). However, smaller policies remain unaffected. Overall a negative for insurance companies as it will impact the high-value premium policies -- thus impacting overall industry GWP growth. A similar provision was already introduced for ULIPs in 2021 wherein the aggregate premium was restricted to Rs 2.5 lakh in a year for tax-exempt proceeds", said Bardia. Mehta said improvements in ease of doing business specifically, the changes pertaining to simplification of the KYC process, one-stop solution for identity and address updating, common business identifier, unified filing, and entity <keyword id="3745298" type="General" weightage="80" keywordseo="digi" source="Orion">Digi</keyword> locker will make placement of insurances easier. Claims payment would also be facilitated. Changes in personal income tax will increase personal disposable income. This will result in individuals' ability to buy better, higher-value insurance to manage their risk, Mehta said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/government-to-set-up-three-centres-of-excellence-in-artificial-intelligence/articleshow/97520242.cms">Budget 2023 gives a boost to artificial intelligence – government to set up three centers of excellence</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/tax-rate-revision-will-increase-purchasing-power-of-middle-class-bandhan-bank-ceo/articleshow/97521375.cms">Tax rate revision will increase purchasing power of middle class: Bandhan Bank CEO</a>

Insurance policies where premium is above ₹5L no more tax exempt

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/57041a2752bcd0320c8bade6-2420-1815/gettyimages-516783966.jpg" alt="prince harry computer" data-mce-source="Chris Jackson/Getty Images" data-mce-caption="Prince Harry chats to rangers as he learns about 'tiger traps' the WWf and local rangers in Bardia National Park (Western Nepal) on day three of his visit to Nepal on March 21, 2016 in Bardia, Nepal." />Chris Jackson/Getty ImagesPrince Harry chats to rangers as he learns about 'tiger traps' the WWf and local rangers in Bardia National Park (Western Nepal) on day three of his visit to Nepal on March 21, 2016 in Bardia, Nepal.</div></div></div>From one of <a href="http://www.businessinsider.com/q1-stocks-comeback-2016-3">the greatest comebacks</a> in stock market history to the explosion of Chinese companies <a href="http://www.businessinsider.com/chinese-investors-gobbling-up-us-companies-2016-4">gobbling up US firms</a>, there's a lot to take in in finance right now. To highlight the finance lingo investors are trying to better understand, the <a href="http://www.investopedia.com/">Investopedia</a> team listed the fastest-growing search terms on the platform for the month.The terms range in focus from the Federal Reserve to hiding money illegally.Investopedia provided their top terms to Business Insider and we've assembled them along with comment from Investopedia on each.Check them out below↓This story was originally published by <a href="http://www.investopedia.com/" target="_blank">Investopedia</a>.

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Life insurance stocks fall up to 10% after Budget pushes for new tax regime

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Insurance policies where premium is above ₹5L no more tax exempt

IANS

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