In the Union Budget 2022, Union Finance Minister Nirmala Sitharaman has proposed introduction of a new insurance policy for differently abled persons.
Sitharaman said that while parent or guardian can take insurance to take care of differently abled person, the current norms say that such an individual can get lumpsum or annuity support only after the death of parent or guardian.
The FM said, “There could be situations where differently abled dependants may need payment of annuity or lump sum amount even during the lifetime of their parents/guardians. I propose to thus allow the payment of annuity and lump sum amount to the differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardians attaining the age of sixty years.”
This essentially means that insurance companies can introduce new policies wherein they can offer survival benefit to differently abled persons. With this, differently abled individuals can get regular income through annuity or lumpsum income even if their parents or guardians are alive.
However, parents or guardians will have to attain 60 years of age to avail this benefit for their loved ones. So far, differently abled individuals could avail such a benefit only after death of parent or guardian.
MFD Rishabh Adukia of Nine Cube, believes that the maturity proceeds from such an income will not be taxed in the hand of differently abled individuals.
Sandeep Sehgal, Partner – Tax AKM Global said that policyholders can also avail tax deduction under section 80 DD on this new policy for differently abled person.
The amendment will be applicable from April 1, 2023.