Finance ministry looking into life insurers' tax relaxation plea

Officials say Budget's proposal to tax high-value policies of Rs 5 lakh and above is unlikely to have significant impact on the industry

The relaxations sought by the life insurance industry on the Budget announcement of taxing high-value policies with premiums of Rs 5 lakh and above are currently under examination by the finance ministry.

Although deliberations are going on with the industry, no final decision has been taken on this matter, a senior finance ministry official said on Monday.

The Centre, in this year’s Budget, proposed to tax proceeds from high-value life insurance policies (non-unit linked plans).

This is to plug the arbitrage that high-net worth individuals (HNIs) are using to get tax-free returns on their high-value insurance policies through Section 10