The life insurance sector will see a slew of changes in the next few days as the government tries to increase its penetration across India and canalise huge funds with these companies into infrastructure.
Finance minister P. Chidambaram said on Monday that IRDA, the insurance regulator, had agreed to come out with a new policy giving automatic clearance to standard life insurance products, and relax investment guidelines to encourage the flow of funds into the infrastructure sector.
Mr Chidambaram has also asked the department of revenue to examine if service tax could be reduced on first premiums for life insurance polices and separate exemption limits created for pension schemes.
“I have asked the department of revenue, CBDT and CBEC to complete examination of these suggestions by October 10, so that appropriate decisions may be announced shortly thereafter,” the finance minister added.
He said the tax authorities were asked to explore if there could be a reduction in service tax on first year regular premiums as well as single premium policies.