The premium paid for life insurance and health insurance by senior citizens can be exempted from tax. A senior official gave this information on Saturday. A group of ministers met on Saturday to decide on the GST rate on life and health insurance. During this, it was decided to exempt from GST the premium paid for health insurance with coverage up to Rs 5 lakh for persons other than senior citizens. The final decision in this regard will be taken by the GST Council.

How much does GST cost?

Premiums paid for health insurance coverage of more than Rs 5 lakh will continue to attract 18 per cent GST. Currently, life insurance premiums paid for term policies and 'family floater' policies are charged 18 per cent GST. "The GoM members are broadly in agreement for a reduction in rates on insurance premium. The final decision will be taken by the GST Council," an official said. Bihar Deputy Chief Minister Samrat Choudhary said, "Every member of the GoM wants to provide relief to people. Special attention will be given to senior citizens. We will submit a report to the council. The final decision will be taken by the council."

No GST on insurance premium for senior citizens

However, there may be no GST on insurance premium paid for senior citizens, irrespective of the coverage amount. The GST Council in its meeting last month had decided to constitute a 13-member ministerial group to decide on tax on health and life insurance premium. Choudhary is the convener of the group of ministers. It includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana. The group of ministers was directed to submit its report to the Council by the end of October.