GST Council eyes big win for health insurance: Premiums may soon be tax-free
The proposal to do away with Goods and Services Tax (GST) on health insurance premiums is expected to be a key focus at the upcoming 55th GST Council meeting, according to senior government sources speaking with Business Today TV.
The Group of Ministers (GoM) on Life & Health Insurance, which met in mid-October, recommended a GST exemption for pure term life insurance covering family members and individuals. Additionally, the panel proposed a tax exemption on all health insurance policies for senior citizens.
Next week, the fitment committee — comprising state and central tax officials — will convene to assess the specific revenue implications of the GoM’s recommendations.
"There may be minor adjustments to health insurance premiums for non-senior citizens and investment based insurance schemes," an official shared.
As per official data, in the 2022-23 fiscal year, total health insurance premiums were around Rs 90,032 crore, with individual health insurance premiums contributing Rs 35,300 crore. The 18 per cent GST rate currently generates Rs 6,354 crore from these individual premiums.
