Income Tax Budget 2024 Expectations: Make annuity tax-free, demands insurance industry
“There is a vast ageing population, which underlines the burgeoning pension and annuity market in India. A tax break on annuity could, therefore, be a game changer. Currently, annuity is completely taxed in the hands of the customer, which spoils the product’s allure. Apart from doing away the double taxation (annuities are taxed at entry and exit), the government may also consider extending the tax benefit of Rs. 50,000 offered on NPS under Section 80CCD (1b), which is over and above the Rs. 1,50,000-lakh-limit of 80C, to Annuities. Annuities are the only solution, which provides complete protection from the perspective of living longer (i.e. outliving one’s corpus), by providing a regular flow of income throughout one’s lifetime, purchased in lieu of a single lump-sum amount,” says Sumit Rai, MD & CEO, Edelweiss Tokio Life Insurance.
