The life insurance industry has lost hopes of the government rolling back the tax rebate on insurance premium under section 88 of the Income Tax Act.
The industry feels that it is not worth fighting for it when the government has included more and more benefits under section 88, without increasing the actual amount.
This year, the government made eligible rebate on educational expenses under the existing limits of Rs 70,000 available under Section 88.
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The government is not increasing the benefit, but adding more heads under which tax rebate can be allowed.
It has also not set aside a separate sum for investment in insurance products, said a senior insurance chief.
The top brass of the life insurance industry is meeting the finance ministry this week to thrash out against the Budget proposal on removal of tax exemption on investments in life insurance products.
It is hopeful of a roll back on the tax free returns on insurance policies where the annual premium paid is in excess of 20 per cent of the sum assured.
The Insurance Regulatory and Development Authority (Irda) wrote to the finance ministry, pointing out that a contract once entered into, cannot be changed with retrospective effect.
The Life Insurance Corporation of India (LIC)