| |
| Rediff India Abroad Home | All the sections | |
|
|
Retirement planning gets an impetus February 28, 2006 18:56 IST This year's budget has taken a positive step towards rationalising tax-benefits on life insurance products. It has also put a smile on individuals planning for retirement. This article takes a look at how the budget will impact individuals planning to buy life insurance. The budget has enhanced the overall Section 80CCC limit available on pension plans. In layman language, what it means is that individuals can now contribute upto Rs 100,000 towards premiums paid annually for pension/retirement plans. With this move, Section 80C (which is inclusive of Section 80CCC ) offers a lot more flexibility to the individual. He can now take life insurance plans and/or pension plans in line with his needs without worrying about the restrictive limits for the purpose of claiming tax benefits. In our view, there was a crying need for enhancing the pension plan Section 80CCC limit to promote retirement planning. Till date, individuals were 'incentivised' only to the extent of Rs 10,000 for investments in pension plans. This is also in line with Personalfn's expectations from the Union Budget. The EEE (exempt-exempt-exempt) regime of taxation has not been tampered with. Effectively, it means that maturity/death benefits available under Section 10 (10D) on life insurance policies stay as they are. This has also acted as a setback for those unscrupulous life insurance agents who were luring prospective insurance seekers with the bait that this year's budget would move from an EEE regime to an EET system of taxation. Equitymaster.com is one of India's premier finance portals. The web site offers a user-friendly portfolio tracker, a weekly buy/sell recommendation service and research reports on India's top companies.
Complete Coverage: Budget 2006 - 2007
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
