The Department of Finance Joint Secretary has stated that a reduction in Goods and Services Tax (GST) will make insurance more affordable for customers. According to a report by ET Now, the government has received requests to remove GST on term life and health insurance.
It has been suggested that GST on term life insurance premiums and premiums paid by senior citizens for health cover may be exempted from tax. The decision will be made by the GST Council after a meeting of the Group of Ministers (GoM) on the matter.
Currently, 18 per cent GST is levied on life insurance premiums for term policies and family floater policies. The GoM members are in favor of reducing the GST rates on insurance premiums, particularly for senior citizens. The aim is to provide relief to people, with a focus on senior citizens. The final decision will be taken by the GST Council.
The GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, includes ministers from various states. Their report on the tax on health and life insurance premiums is expected to be submitted to the Council by the end of October. There may be no GST on insurance premiums paid for senior citizens, regardless of the coverage amount.
Overall, the reduction in GST on insurance premiums is seen as a positive step towards making insurance more accessible and affordable for the general public.
