Union Minister Nitin Gadkari has reached out to Finance Minister Nirmala Sitharaman, urging the removal of GST on life and medical insurance premiums. This appeal follows after criticism of the Budget 2024 from various quarters.
Mr. Gadkari cited a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union in his letter. The Union raised significant concerns regarding the 18% GST imposed on life and medical insurance premiums.
GST on Life Insurance
Mr. Gadkari highlighted that imposing GST on life insurance premiums essentially means taxing the uncertainties of life. He stressed that individuals purchasing life insurance to protect their families should not be burdened with such a tax.
He also pointed out that the 18% GST on medical insurance premiums hampers the growth of this crucial sector. The high tax rate serves as a deterrent, discouraging people from purchasing necessary medical insurance.
“In view of the above, you are requested to consider the suggestion of Withdrawal of GST on Life and Medical Insurance Premium on priority as it becomes cumbersome for the senior citizens as per rules with due verification along with other relevant points raised,” Gadkari said in his letter to Ms Sitharaman.
The Union also raised other important issues, such as the differential treatment of savings through life insurance, the reintroduction of income tax deductions for health insurance premiums, and the consolidation of public sector general insurance companies.