Budget 2020:21: Income Tax relief on Home Insurance can be announced

The Finance Minister Nirmala Sitharaman may announce big tax relief on home insurance in this year's budget. Sources aware about the development said, "the finance minister can announce exemption on premiums of the home insurance that a citizen will pay".

The Union Budget will be presented on Saturday, February 1, 2020, in the Parliament. Sources aware about the development has informed that the government has plans to provide exemption on the premium up to Rs10,000/year, in line to the exemptions that are granted in the case of health and life insurance segments.

The tax relief can be granted either by adding a separate section related to insurance rebate that is provided in the case of health and life insurance or by extending the scope of Section 80D. The government is also considering an affordable home insurance relief in the affordable housing sector.

Such any announcement and proper dissemination of the information to the public will give a boost to the home insurance segment. Thus, it will also help several general insurance companies in increasing their business. Besides, it will also encourage people to come out and opt for a solution that can protect them from bearing any additional financial pain, which may occur due to accidental damages to their homes.

Relief to the Government

Acceptance of Home Insurance facility will also reduce the pressure on the government that it bears in the form of relief fund that is announced after the natural calamities like floods and earthquakes hit an area in the country. Such damages were seen in the recent past during floods in Uttarakhand, Odisha, Kerala and Chennai, which caused considerable damages to life ad properties including homes.