Budget 2020: Insurers, mutual funds fear impact from tax code nudge

Investors will have to forego tax benefits on several products if they switch to new regime

The new proposed tax code that offers lower rates to taxpayers, but eschews exemptions and deductions, has created uncertainty for insurers and mutual funds (MFs) that attract sizeable investor flows into the tax-saving products.

"At least 30-40 per cent of the flows in the insurance industry comes in for the purpose of tax-saving. So, we need to rework on how to regain business which could come under threat if potential investors opt for new tax regime," said chief executive officer of a leading domestic insurance company, requesting anonymity.

On Saturday, insurance stocks had come under heavy selling pressure. SBI Life