Skip to main content

IRDA may Allow Insurers to Raise Stake in Cos Beyond 15%

New Delhi: The Insurance Regulatory & Development Authority of India is open to insurers surpassing the 15% limit on equity holdings in a company under some conditions.

“In certain circumstances, certain companies will like to have higher exposure,” IRDAI chairman TS Vijayan told ET. “If someone wants higher exposure in a particular company, they will have to take specific permission of the authority.”

Vijayan added that such a provision is fair and follows the principles of good risk management. The move may allow Life Insurance Corporation of India (LIC), the country’s largest insurer, to participate in the government’s sale of shares in blue chip companies held by the Specified Undertaking of the Unit Trust of India (SUUTI).

Earlier this month, the government sold a 1.63% stake in Larsen & Toubro for ? 2,100 crore. LIC didn’t take part in the stake sale.

At present, LIC holds 16.04% stake in L&T,14.34% stake in ITC and 14.47% in Axis Bank.

“If the regulator permits, the insurer can raise its stake to as high as 20%,” said a government official aware of the deliberations, adding that LIC is already in talks with IRDAI. Vijayan sa- Okay to Exposure Move may allow LIC to participate in govt stake sale in blue chip companies held through SUUTI

Higher equity exposure likely with IRDAI permission LIC said to be in talks with the insurance regulator on raising equity stake Govt sold stake in L&T for in Oct Govt’s holding in SUUTI is worth id the watchdog will examine each case individually. “If some companies approach us on that, we will like to see whether that company itself is clear on what they ask for, we will examine whether all requirements are fulfilled,” he said. The regulator would like to ensure that all the due diligence has been done.

The government’s stake held by SUUTI is collectively valued at almost ? 62,000 crore, more than the ? 56,500 crore budgeted from disinvestment in the current financial year.

Vijayan said there is a lot of glo- IRDAI chairman bal interest in India’s insurance sector, as evinced at the recent Asian Actuarial Conference. On the impact of the Goods and Services Tax, which the government may introduce in the next financial year, the regulator said the insurance industry already pays service tax.

“Whatever initial hurdles are there will be smoothened out,” he said, adding that insurance companies have not raised any issues.

The regulator noted that the challenge for insurance companies is product distribution and widening their reach.

“If you look at the economy in India, a lot of distribution is happening through the ecommerce platform…Many companies have taken initial steps,”

TS Vijayan said that such a provision is fair and follows the principles of good risk management Vijayan said.

On the issue of listing staterun general insurers, Vijayan said the government has decided in principle to list the companies. “Officially, they have not told us,” he added.

16TH NOVEMBER, 2016, THE ECONOMIC TIMES, NEW DELHI

Comments

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s