GST Council likely to exempt term life insurance from tax, no change in investment-linked plans
The GST Council is expected to exempt term life insurance policies from the goods and services tax (GST) while continuing to tax insurance policies with an investment component, a decision that could boost demand for pure protection policies.
The decision is likely to be formalised in the GST Council meeting on September 9, a senior government official said, requesting anonymity.
“Life insurance with an investment portion will not be exempted. There is no sense in exempting that. It is basically an investment. We have to exempt the uncertainties of life, not investments,” the official said, explaining the rationale of the exemption.
The revenue loss from the exemption of term life insurance from GST is estimated to be around Rs 200 crore annually, he added.
