Indian life insurers tumble on proposal to tax policies at maturity

Max Financial Services

01/02/2023 09:21

** Shares of insurers SBI Life  SBIL.NS , HDFC Life
 HDFL.NS , LIC  LIFI.NS  and Max Financial  MAXI.NS  tumble
between 4.5% and 11%
    ** Finance Minister Nirmala Sitharaman proposes to tax total
returns upon maturity of life insurance policies (except ULIPs)
if the aggregate premium of such policies is more than 500,000
rupees a year
    ** Rule applicable for polices issued on or after April 1,
2023 and will not affect tax exemption on amount paid on death
of insured
    ** "The move is very negative for the entire sector," says
AK Prabhakar, head of research at IDBI Capital
    ** "Previously, insurance, when it matures, it was exempted
from tax. Now there will be tax above 500,000 rupees"
    ($1 = 81.6970 Indian rupees)
 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; Mobile:
+919769003463))