The forthcoming GST Council meeting scheduled for October 7 brings potential good news for senior citizens, as there is a possibility of a reduction in the tax rate on health insurance premiums.
It has been reported that the 52nd GST Council is considering a proposal to lower the GST rate on health insurance from the current 18 percent to 12 percent specifically for senior citizens. Sources have informed ET NOW that during the meeting on October 7, the council may deliberate on the decision to decrease the GST rate for senior citizens.
Furthermore, the Standing Committee on Finance has also recommended a reduction in GST for health insurance. This recommendation comes in response to appeals from insurance companies and healthcare providers who have been advocating for a reduction in GST to improve insurance penetration.
The awareness of health insurance has surged in the wake of the COVID-19 pandemic, and data from insurance companies indicates consistent growth in health insurance premiums of more than 20 percent over the past two years. According to the latest data from the Insurance Regulatory and Development Authority of India (IRDAI), there has been a 23 percent increase in health insurance premium growth compared to the previous year, up to August 2023.
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As of August 2023, health insurance premiums have reached Rs 44,374 crore, compared to Rs 39,161 crore during the same period last year. Health insurance now constitutes a significant 39 percent market share within the non-life insurance sector.
