In recent turn of events, the Group of Ministers (GoM) proposed to exempt Goods and Services Tax (GST) on term life insurance and health insurance premiums for senior citizens apart from the other proposed changes to the GST.
If the GST Council approves this plan, it could be a big relief for many taxpayers in the country.
According to the PTI report, in a recent meeting, the GoM suggested that health insurance premiums up to Rs 5 lakh for individuals (except senior citizens) should be exempt from GST. However, if the health insurance coverage is above this amount, it will still be taxed at 18 per cent.
The GoM was set up after discussions at the GST Council's September meeting, where people raised concerns about the current 18 per cent GST on life and health insurance premiums. This group, made up of ministers from various states, is expected to submit its recommendations by the end of October, added the report.
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The call to lower or remove GST on insurance has been a long standing demand from the insurance industry.
Moreover, many people feel that reducing these tax rates could make insurance more affordable for everyday buyers and will also give a positive growth in the insurance market.
Although, the final decision is yet to come which ultimately rest with the GST Council but the decision will be closely watched by industry stakeholders and policyholders alike, as it could signify a new era of more accessible and affordable insurance in India.
According to a PTI report, this move is placed with a broader consensus which took place during the 54th GST Council meeting, aimed to bring relief to individuals and particularly senior citizens struggling with high insurance costs.
