'Recommend reducing GST premium paid towards insurance'

Budget 2020: 'Recommend reducing GST premium paid towards insurance'

By Animesh Das,

Head of Product Strategy - ACKO General Insurance

Currently, health insurance premiums for Individuals or Parents below 60 years are tax exempted up to ₹ 25,000 and for senior citizens is up to ₹30,000 under section 80D of the Income Tax Act. It would be a welcome move if the government will remove the current limits and allow tax exemption on actual/full premium paid by the taxpayer. This will increase the propensity of individuals buying higher amount of coverage.

Also, it will be appreciable if government will widen the relationship for whom the taxpayer can buy the health policy. The policy should include immediate relatives such as brother/sister/Parents-in-law etc.

Reduction in GST Rate

For better affordability, it is recommended excluding the application of GST premium paid towards insurance as the premium for insurance has increased substantially in past years. It will be a big move to enhance insurance penetration and provide better coverage to common masses.