The Central Government is considering a major relief for insurance policyholders by proposing GST exemption on life and health insurance policies for individuals. Currently, these policies attract 18% GST, which significantly increases premium costs for customers.
What’s Proposed?
No GST on life and health insurance premiums paid by individuals.
Move aimed at making insurance more affordable for the common man.
The proposal comes with two key objectives:
Why This Move?
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- Reduce policy costs for individuals, making insurance coverage more accessible.
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- Ensure tax relief is directly passed on to customers, rather than benefiting insurers alone.
Impact on Revenue
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- The Centre estimates a potential revenue loss of around ₹9,700 crore annually if the exemption is approved.
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- States have expressed concern and emphasized that the benefit must directly reach policyholders.
Next Step
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- A Group of Ministers (GoM), chaired by the Finance Minister, will prepare a report on this matter.
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- The report will be submitted to the GST Council, which will take the final call.
What It Means for You
If approved, this could mean lower premiums on your life and health insurance policies. For many families, this will be a much-needed financial relief and could encourage more people to get insured.
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