Ahead of the Union Budget 2026, senior leaders from the life insurance industry have called for targeted tax reforms, regulatory parity and sustained public investment to strengthen retirement security, insurance penetration and inclusive growth in India.
VenkyIyer, Co-Chairperson of the Insurance Awareness Committee (IAC-Life), said taxation has a disproportionate impact on pension earners’ incomes. He noted that aligning pension taxation with other fixed-interest instruments by taxing only interest or gains could improve post-retirement income while mobilising long-term savings through life insurance. Iyer also advocated a standard deduction for pensioners who do not commute their corpus to ensure tax parity across pensioners.
Echoing the need for structural reforms, Rushabh Gandhi, MD & CEO of IndiaFirst Life Insurance, said the industry is looking to Budget 2026 for measures that support the vision of “Insurance for All by 2047”. He described life insurance as a long-term social protection product and sought enabling GST input tax credit for insurers post exemption to sustain affordability. Gandhi also called for regulatory and tax parity between pension products offered by life insurers and the National Pension System to widen retirement coverage.
Separately, Mr. Ajit Banerjee, President and Chief Investment Officer of Shriram Life Insurance Company, said the Union government is expected to maintain fiscal prudence while continuing capital expenditure to support GDP growth, with higher allocations likely for defence, railways, shipbuilding and renewable energy. He stressed the need for greater spending on education, health, climate-risk mitigation and artificial intelligence research to build a “Vikshit Bharat”.
On taxation, Banerjee said while reforms in recent years have narrowed the scope for changes, increasing insurance deductions either by carving them out of Section 80C or raising the limit would help boost insurance penetration.
