Health Insurance : Nilesh Sather, former member of IRDA, says about this, there was a demand by the insurance sector to reduce 18% GST on health insurance premium.
The imposition of 18% GST (Goods and Services Tax) on insurance premium is a kind of atrocity.
The budget is about to come after just a week. Union Finance Minister Nirmala Sitharaman will present the budget on 1 February . In view of the Corona epidemic, it is expected that the government will give a ‘booster dose’ to the health sector.
The health sector, especially the insurance sector, has got many hopes from the upcoming budget . There is a demand of this sector that insurance has a big role to play in making the lives of people safe in Corona.
The government should promote the insurance sector. For this, if the government cuts the tax deduction of Rs 25000 under section 80D on health insurance to 1.5 lakh in the budget, then there will be a good incentive.
A GST of 18 per cent has to be paid on the purchase of insurance, which is being demanded to be reduced to 5 per cent.
Section 80D helps an individual taking life insurance or a family or child policy to save tax of up to Rs 25,000. If the same policy is taken for the parents, then there is a tax exemption of Rs 50,000 on it.
If the policy taker whose age is less than 60 years or the same person takes the policy for the family, then a discount of Rs 25,000 is available on own policy, family policy or child policy. If you have parents above 60 years of age, you can get a discount of Rs 75,000.
How much tax exemption do you get now?
If the person taking the policy and his parents are also above 60 years of age, then there is a deduction of up to 1 lakh under section 80D. In order to enable more and more people to take health insurance, there is a demand to increase the exemption amount to 1.5 lakh.
The insurance sector has been demanding for a long time to reduce the GST on life insurance. In view of the Corona epidemic, the demand of this sector is that the customer has to pay 18 percent GST on buying insurance right now.
If the rate of GST will be reduced to 5%, then the policy will be somewhat cheaper and more and more people will be able to take advantage of it.
Government’s response
This issue has also arisen in the Lok Sabha, to which the government has responded. Union Minister of State for Finance Bhagwat Karad said in the Lok Sabha that the GST Council has taken the decision of 18% GST on insurance.
The GST Council consists of representatives of the states and the central government. Karad told the Lok Sabha that the government has not received the recommendation to reduce GST. The GST Council is also not considering reducing this rate.
What do experts say
Nilesh Sathe, former member of IRDA, says about this, there was a demand by the insurance sector to reduce 18% GST on health insurance premium. The imposition of 18% GST (Goods and Services Tax) on insurance premium is a kind of atrocity.
In the absence of any social security, he says, insurance becomes a necessity factor for people. All essential commodities are out of the purview of GST, then why should premium be taxed, and that too heavy.
LIC President MR Kumar has also given a similar opinion in one of his media interviews. According to Kumar, 18% GST on insurance is too much. Insurance can be more useful when its GST rate is reduced.
After the premium of health insurance in Kovid became expensive, the demand for reducing GST has increased even more.
