• In the previous year's budget it was proposed to make withdrawal up to 40% of the corpus at the time of retirement tax exempt in the case of National Pension Scheme. In budget 2017-18, the proposed to provide further relief to an employee subscriber of NPS, allowing exemption to partial withdrawal not exceeding 25% of the contribution made by an employee.
• Services provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way of life insurance to members of the Army, Navy and Air Force under the Group Insurance Schemes of the Central Government is being exempted from service tax from 10th September, 2004 Existing 14%.
• TDS of 5% is being deducted from commission payable to individual insurance agents even if the income of some of them may be below taxable limit. Its proposed to exempt them from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit.
• The Fasal Bima Yojana (crop insurance) launched by our Government is a major step in this direction. The coverage of this scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. The Budget provision of Rs 5500 crore for this Yojana in 2016-17 was increased to Rs 13240 crore in 2016-17 to settle the arrear claims. For 2017-18, a sum of Rs 9000 crore has been provided. The sum insured under this Yojana has more than doubled from Rs 69000 crore in Kharif 2015 to Rs 1,41,625 crore in Kharif 2016.
• In order to provide parity between an individual who is an employee and an individual who is self-employed, it is proposed to provide that the self-employed individual shall be eligible for deduction upto twenty per cent of his gross total income in respect of contribution made to National Pension System Trust.
• LIC will implement a scheme for senior citizens to provide assured pension, with a guaranteed return of 8% per annum for 10 years.

Stocks to watch

ICICI Prudential Life Insurance, Exide Industries, Reliance Capital

Outlook

The Union Budget 2017-18 has proposed sharply expand coverage of Fasal Bima Yojana scheme from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. Incidentally, crop insurance is a major growth driver for the general insurance industry. The removal of 5% of TDS from commission of insurance agents will provide a further fillip to the sector, boost agent retention and encourage more young entrepreneurs to join the industry.