Insurance stocks plummet up to 13 pc on Budget day

Shares of insurance companies came under selling pressure, tumbling up to 13 per cent, on the Budget day.

Max Financial Services plummeted 12.78 per cent, ICICI Prudential Life Insurance Company Ltd plunged 10.93 per cent, SBI Life Insurance Company tumbled 10.02 per cent, The New India Assurance Company 7.16 per cent and HDFC Life Insurance Company 6.06 per cent on the BSE.

A taxpayer opting for new income tax slabs and rates will have to forego a host of exemptions and deductions, including a standard deduction of Rs 50,000, tuition fee of children, and contribution towards insurance premium and provident fund.

However, the new income tax system proposed by Finance Minister Nirmala Sitharaman in the Union Budget 2020-21 is optional and a taxpayer can choose to remain in the existing regime with exemptions and deductions.

As per the Budget document, an individual taxpayer opting for the new tax regime will not be entitled for deduction under 80C of the Income Tax.

Section 80C provides deduction for contribution towards insurance premium, deferred annuity, provident fund and certain type of shares.

Taxpayer will also have to forego deduction under 80CCC (contribution towards certain pension fund), Section 80D (health insurance), 80E (interest on loan for higher education), 80EE (interest on loan taken for residential property), 80EEB (purchase of electric vehicle), 80G (donation to charitable institutions), and 80G (rent paid).