No GST on life and health insurance? Here's how it will impact you
The Goods and Services Tax (GST) Council is considering a proposal to remove GST on premiums paid for life and health insurance.
This change, if implemented, could bring relief to policyholders and support the insurance sector by lowering the costs of these essential services.
At present, both life and health insurance premiums are taxed at a rate of 18%. However, the Council is exploring ways to reduce this burden, especially for senior citizens and those with lower health coverage.
The proposal suggests that premiums paid for health insurance covering up to Rs 5 lakh for individuals, excluding senior citizens, may be exempted from GST. However, for policies with higher coverage, premiums over Rs 5 lakh would still be taxed at the current 18% rate.
For senior citizens, the proposal offers even greater relief. Regardless of the coverage amount, health insurance premiums paid by senior citizens could be exempted from GST entirely.
The Council is also considering an exemption on GST for life insurance premiums, including term policies and family floater plans. Currently, premiums for these policies are taxed at 18%.
The decision is still being discussed, and a final call will be taken by the GST Council.
