Life insurance companies have recommended a standalone additional exemption of Rs 50,000 for life insurance premiums under the Income Tax Act. They also sought the Exempt, Exempt, Exempt (EEE) bracket for life insurance policies
New Delhi: The insurance industry wants the government to create a separate tax exemption limit of Rs50,000 for life insurance premium in the forthcoming budget to encourage more individuals to buy such policies, reports PTI.
"It is suggested that a standalone additional exemption limit of Rs50,000 (over and above the already existing limit of Rs1,00,000) be specified for (life) insurance premiums alone under the Income Tax Act," Canara HSBC OBC Life Insurance chief financial officer Anuj Mathur said.
Currently investment in saving instruments, like risk cover, pension products, PF contributions, National Savings Certificates and others, are eligible for aggregate deduction of Rs1 lakh.
Besides, investments in infrastructure bonds up to Rs20,000 also qualify for deduction.
"We recommend a separate limit for tax exemption for long-term saving instruments like life insurance or increasing the limits on life and health insurance premium could be looked at," Max New York Life Insurance MD & CEO Rajesh Sud said.
Industry experts said changing lifestyle made necessary an assurance for future income generation, thereby increasing the need for a life insurance policy.
Mr Mathur said in order to ensure better insurance penetration, life insurance companies should be allowed to come under the Exempt, Exempt, Exempt (EEE) bracket.
Under EEE, a policy holder gets tax exemption at various stages during the term of the policy.
The insurance sector needs capital on a periodic basis for expansion and experts hope that the budget session would also see passage of FDI bill in insurance sector to 49%, from the current 26%.
"There is a need for more proactive regulatory architecture for insurance. Foreign insurers could be allowed to set up under a wholly-owned subsidiary with 100% FDI. The life insurance industry is very capital intensive and companies need huge capital to fund growth," KPMG executive director Naresh Makhijani said.
Life insurance companies currently pay tax of 12.5% and the Direct Taxes Code, which would replace the archaic I-T Act from 1 April 2012, does not specify any specific limit for the same. This would mean being taxed at 30%.
"A significant portion of funds of life insurance companies are invested in infrastructure projects. Also companies incur huge losses initially due to long gestation period. With higher tax rates, it will be unattractive proposal for new investors to invest in the sector," Max New York Life's Mr Sud said.
The ATF price hike, the second biggest increase in a year, comes on the back of another 4.5% jump in rates effected from 1st February. This is the ninth straight increase in jet fuel prices since October 2010, when international crude oil prices started soaring
New Delhi: State-run oil marketing companies on Tuesday raised aviation turbine fuel (ATF) prices by a massive 4%, the ninth straight increase in rates since October, reports PTI.
ATF rates in Delhi have been hiked by Rs2,104 a kilolitre, or 4.12%, to Rs53,538 a kilolitre (kl) with effect from midnight of 15th February, an official of Indian Oil Corporation, the nation's largest fuel retailer, said.
The hike, the second biggest increase in a year, comes on the back of another 4.5% jump in rates effected from 1st February. "The hike has been necessitated because of spurt in international oil rates," the official said.
This is the ninth straight increase in jet fuel prices since October 2010, when international crude oil prices started soaring.
The ATF price in Delhi in 1st October was Rs40,728.52 a kl. The rates were increased by Rs12,334.48 a kl or 30.28% in nine tranches since then, in tandem with surge in global oil prices.
Jet fuel will cost Rs53,538 a kl in Mumbai, home to the nation's busiest airport, from tomorrow, as against Rs51,332.82 a kl currently.
No comment could be immediately obtained from airline companies on the impact of the latest price hike on passenger fares. Fuel cost accounts for 40% of the airlines' operating cost.
Indian Oil Corporation and sister public sector retailers Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.
As demand for steel grows in India, the steel ministry had set a target of 120 million tonnes per annum, by end 2012; Tata Steel more than doubles Q3 profit
India is not likely to achieve its ambitious plans to produce 120 million tonne per annum (mtpa) of steel by the end of 2012, a top Tata Steel official has said.
"I don't think we will produce 120mtpa by the end of 2012, from the current production capacity of 67mtpa, as we are still a net importer," Hemant Nerurkar, managing director, Tata Steel, told Moneylife on Tuesday.
The Indian steel ministry aims to produce 120mtpa by the end of 2012, to become the second largest steel producer in the world. According to the World Steel Association, the country is today the world's fifth largest steel producer.
Yesterday, Tata Steel, the world's seventh largest steel producer, reported an impressive growth of 112% in consolidated net profit for the third quarter ended December, on the back of growing demand and high product prices. The company (including its European unit Corus) recorded a net profit of Rs1,003 crore in the quarter from the Rs473 crore in the previous corresponding period.
The company's consolidated net sales grew by around 10% to Rs28,606 crore, over the Rs26,067 crore last year. The company's Indian operations did better than the European operations in the third quarter. The Indian operations reported sales of Rs7,397 crore, up 16% from a year earlier, while the European unit's sales stood Rs17,940 crore, up 7% from a year earlier.
The Tata Steel stock price gained nearly 4.5% to Rs644.15 on the Bombay Stock Exchange today, compared with the benchmark Sensex which stayed more or less flat.
"India's demand for steel is expected to grow by 10%-12% this year as demand from the auto sector is surging. We aim to provide one million tonnes of auto products for the auto industry," Mr Nerurkar said. "We are on track to achieve our volume target of 6.4 million tonnes for this financial year."
About steel prices, the Tata Steel managing director said, "Prices will be determined by international trends and we will be in a position to pass on the price hikes to our customers."
In 2011-2012, Tata Steel will focus on debottlenecking its India operations to meet the growing demand. "To maintain our market share we will focus on debottlenecking our Indian operations until the expansion programme at the Jamshedpur plant is completed," Mr Nerurkar said.
The Jamshedpur programme is expected to be completed by December 2012. Last month, Tata Steel raised Rs3,477 crore through a follow-on public offer. The company intends to spend Rs1,875 crore for the Jamshedpur expansion programme and Rs1,090 crore will be used to pay the redemption of some maturing redeemable non-convertible debentures.
The company has started ground work for its 6 million tonnes capacity Orissa project and it is looking for mines which will provide iron ore for at least for 30 years.