GST on Health Insurance: The yearly premium for individuals with personal health insurance might be lowered. In the next GST Council meeting, there is a chance that tax rates on life and health insurance premiums may be lowered. In this, the GST rate on health insurance obtained for an individual can be lowered from the existing 18% to 5%.
In addition to this, it is suggested to lower the GST rate on health insurance for an annual coverage of up to five lakhs. According to reports , the Group of Ministers has proposed that if health insurance is purchased in a single category, it should fall under the 5% GST bracket; however, after paying the 5% GST on this insurance, the benefit of exemption will not apply when filing income tax returns. In fact, health insurance is categorized into two types. The initial option is the insurance that protects a single individual. The second category encompasses all remaining family members, referred to as group insurance. There is currently a proposal to lower GST on individual insurance.
Conversely, the Group of Ministers has proposed lowering the GST rates on life insurance policies, though it remains unclear what the suggested reduction amount is. In addition to this, suggestions have been made to ensure health insurance is affordable for elderly individuals.
Proposal for lowering GST rate
It also proposes lowering the GST rate on health insurance premiums for elderly individuals from 18% to 5%. The ultimate endorsement of the group’s suggestions will occur solely after an in-depth discussion during the council meeting scheduled for December 21.
Government to introduce new slab for imposing GST at 35%?
For several days, there has been a speculation that the government is planning to introduce a new slab for imposing GST at 35 percent on luxury goods and harmful items such as cigarettes and tobacco. The Group of Ministers has suggested a recommendation on this matter, but recently, Minister of State for Finance Pankaj Chaudhary stated that there is no current discussion on the 35 percent slab, nor has the GST Council been presented with any proposal for this slab thus far.