Thanks to the government decision of withdrawing tax benefit from single premium policies, LIC registered a 33 per cent negative growth in total first premium income in the first half of the current fiscal against the corresponding previous period. This is for the second consecutive year that first premium income witnessed a decline.
The decline was despite the fact that individual insurance policies, individual pension policies registered 23 per cent growth while its pension policies witnessed as huge 202 per cent growth in the same period. A large 91 per cent fall in single premium policies have dragged the total premium income down by a large 33 per cent.
The Bima Nivesh, single premium (BNSP) policy which attracted absolute tax exemptions on investment as well as on returns under the Section 10.10D will now be eligible for a small 20 per cent tax exemption while the return on the investment made will attract tax on source.
BNSP policy which attracted bulk of the first premium income for LIC was hit hard by the government
