Health Insurance Service Tax: Health insurance has become very important for everyone. Health insurance is your companion in difficult times. If you have taken a health insurance policy, then you would be aware that 15 percent service tax has to be paid on the health insurance policy. However, the government may soon make an announcement regarding its reduction. Come let us know in detail..
Health insurance is a great way to grow financially and save tax while taking care of your family. This unique investment protects your health. If you have taken a health insurance policy or are going to buy it in the coming days, then there is good news for you. The central government is considering reduction in GST on health insurance premium up to Rs 30,000. The government is considering reducing it from the current 18 percent GST rate to 12 percent.
Let us tell you that its objective is to make health insurance premium more affordable and attractive. At present, in a health insurance policy of up to Rs 30 thousand, four members of a family can get a cover of up to Rs 10 lakh. This cover, however, depends on various factors such as age and type of coverage.
Premium will reduce or you will get more benefits
According to the information, an official says that the initiative of reduction in GST will help in reducing the premium rate or offering additional benefits in health cover option. It will depend on the need of the people. The official says that this is a pending proposal on which a decision can be taken after the completion of Lok Sabha elections 2024. In February this year, the Parliamentary Standing Committee on Finance had said that there is a need to consider 18 percent GST on insurance. Especially on health and term insurance.
Before GST, service tax was 15 percent
In order to make health insurance affordable, the committee had said that consideration can be given to reducing GST on retail insurance policies and term policies, especially for senior citizens. At the time of implementation of GST in the country, it was decided that if any person buys a health insurance policy, he will have to pay 18 percent GST. This was three percent more than the 15 percent service tax applicable in the pre-GST era.
Under the rules of Section 80D of Income Tax, the benefit of tax deduction is available on health insurance premium. Let us tell you, the Insurance Regulatory and Development Authority of India (IRDAI) has recently made a regulatory amendment, after which the waiting period has been reduced from the last four years to a maximum of three years.
