History of Insurance Sector in India

1.       In 1818, Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community.

2.       In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.

3.       In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business.

4.       In 1956,Govt of India had nationalized the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) had absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies i.e total 245 insurance firm.

5.       In 1972, the General Insurance Business (Nationalisation) Act was passed, General Insurance business was nationalized with effect from 1st January, 1973.

6.       The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1st 1973.

7.       107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd.All four companies become subsidiary of General Insurance Corporation of India.

8.       With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.

9.       Until 1999, there were not any private insurance companies in India. The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. Furthermore, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.

10.   No.  Of Indian Insurance Companies in the market.

Type of insurance	Life insurance	General insurance	Re-Insurance
Public Sector Company (ies)	01	06	01
Private Sector Companies	23	18	00
Total	24	24	01

No Income Tax Return for Salary Income upto Rs. 5 lakh

The Income Tax return is not required to file if following conditions are satisfied:

1.       Total Income Should not exceed Rs. 5 Lakh(After deduction u/s 80C to 80U)

2.       The Income should be from Salary and/or Interest from Saving Bank A/c (upto Rs. 10,000)

3.       The Salary Income Should be from One Employer only.

4.       Tax is deducted on Salary as well as Interest Income and Shown under Form 16.

5.       No Tax refund is due to employee.

Case Study for better understanding:

		Mr. A	Mr. B	Mr. C	Mr. D
Employment in		One Company	Two Company	One Company	One Company
Salary Income (A)		5,80,000	5,80,000	5,80,000	7,30,000
Interest Income
Saving Bank Interest (B)		10,000	10,000	10,000	10,000
Interest deduction upto
Rs.1,50,000 on home loan '(C)		-	-	-	1,50,000
Deduction u/s 80C  ( D )		1,00,000	1,00,000	1,00,000	1,00,000
Total Income E=A+B-C-D		4,90,000	4,90,000	4,90,000	4,90,000
Total Income As per Form 16		4,90,000	4,90,000	4,80,000	4,90,000
Whether Income Tax return is required to file		No	Yes	Yes	Yes
Reason for above			Note: 1	Note: 2	Note: 3

Reason for filing of Income Tax Return

Note:1  Mr. B had earned Salary Income from two employer, So he has to file Income Tax Return.

Note: 2 Interest Income of Mr. C is not shown under Form 16. So he has to file Income Tax Return.

Note: 3 Interest on home loan is covered under Loss from House property. So he has to file Income Tax Return.