Premiums paid for term life insurance and health insurance by senior citizens can be availed tax free. The GoM constituted by the GST Council has recommended this. Along with this, GoM decided to reduce the tax rate on 20 liter water bottles, bicycles and practice notebooks to five percent. At the same time, it has been suggested to increase the tax on expensive wrist watches and shoes. However, the final decision in this regard will be taken by the GST Council.
Tips on water to watch
The GoM suggested reducing GST on water bottles of 20 liters and above from 18 percent to five percent. Apart from this, a recommendation was also made to reduce GST on practice notebooks from 12 percent to five percent. Similarly, there is a suggestion to reduce GST on bicycles priced below Rs 10,000 from 12 percent to five percent. The GoM also suggested increasing GST on shoes priced above Rs 15,000 and wrist watches above Rs 25,000 from 18 per cent to 28 per cent.
meeting held on saturday
Let us tell you that a meeting of the Group of Ministers i.e. GoM was held on Saturday to take decisions on other issues including life and health insurance. During the meeting, it was decided to exempt GST on premiums paid for health insurance with coverage up to Rs 5 lakh for individuals other than senior citizens. At the same time, 18 percent GST will continue to be levied on premiums paid for health insurance coverage of more than Rs 5 lakh. Currently, 18 per cent GST is levied on life insurance premium paid for term policies and family floater policies.
GoM formed last month
The GST Council, in its meeting last month, had decided to form a 13-member Group of Ministers to decide on tax on health and life insurance premiums. Samrat Chaudhary is the convenor 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.
