New Delhi: Good news for policyholders! Finance Minister Nirmala Sitharaman has announced that individual health and life insurance will now be completely GST-free. Earlier, people had to pay 18 per cent GST on these policies, which made premiums costlier. This move comes as a major relief for millions of families, making essential insurance coverage more affordable.
The decision was taken during the 56th GST Council meeting on Wednesday. Along with this, the council also scrapped the 12 per cent and 28 per cent tax slabs. Instead, a new 40 per cent bracket has been introduced, which will apply to luxury and sin goods.
Announcing the big relief, Finance Minister Nirmala Sitharaman said, “Insurance services from 18% currently will go into two, three different categories. Exemption of GST on all individual life insurance policies, whether term life, ULIP, or endowment policies, and reinsurance thereof, to make insurance affordable for the common man and increase the insurance coverage in the country.”
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| Delhi: After the 56th GST Council meeting, Union Finance Minister Nirmala Sitharaman says, “Insurance services from 18% currently will go into two, three different categories. Exemption of GST on all individual life insurance policies, whether term life, ULIP, or…
— ANI (@ANI)
She further added, “Exemption of GST on all individual health insurance policies, including family floater policies and policies for senior citizens, and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country.”
Union Finance Minister Nirmala Sitharaman explained that the new measures aim to reduce the burden on ordinary consumers. She said, “These reforms have been carried out with a focus on the common man. Every tax on the common man’s daily use items has gone through a rigorous review and in most cases the rates have come down drastically. Labour-intensive industries have been given a good support. Farmers and the agriculture sector, as well as the health sector, will benefit. Key drivers of the economy will be given prominence.”
Union Finance Minister Nirmala Sitharaman said the new steps are meant to ease the load on everyday consumers. In a press briefing, she noted, “These reforms have been carried out with a focus on the common man. Every tax on the common man’s daily use items has gone through a rigorous review and in most cases the rates have come down drastically. Labour-intensive industries have been given a good support. Farmers and the agriculture sector, as well as the health sector, will benefit. Key drivers of the economy will be given prominence.”
The tax cut will bring relief across many everyday items. Essentials like hair oil, shampoo, toothpaste, soaps, toothbrushes, shaving cream, butter, ghee, cheese, dairy spreads, packaged namkeens, and utensils will now attract only 5 per cent GST instead of the earlier 12–18 per cent. Even baby products such as feeding bottles, napkins, clinical diapers, along with sewing machine parts, have been moved to the 5 per cent bracket.
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