Life Insurance Companies Seeking Extra Tax Benefit
Private life insurance companies are demanding a separate tax exemption of Rs. 1 lakh for long term investments in life insurance and pension schemes in the Union Budget of 2008-09. The Budget will be presented in the Parliament for 2008-09 on February 29, 2008.
Currently, both long and short-term investments are eligible for tax exemption under Section 80 C of the Income tax Act, the limit being Rs. 1 lakh.
The Life Insurance Council of India says that the provision of a separate tax exemption category will encourage of long-term investments which are suffering due to lack of “a proper definition”.