Nitin Gadkari, the minister of road transport and highways, has penned a letter to Finance Minister Nirmala Sitharaman, advocating for the removal of Goods and Services Tax (GST) on life and medical insurance premiums.
What Happened: According to the letter, Gadkari’s plea is based on a memorandum submitted by the Nagpur Divisional Life Insurance Corporation Employees Union. The Union has voiced its disapproval of the 18% GST rate on life and medical insurance premiums, stating that it hampers the growth of this socially crucial business segment.
The Union argues that taxing life insurance premiums is equivalent to taxing life’s uncertainties. They believe that individuals who are trying to safeguard their families against these uncertainties should not be burdened with taxes on the premiums they pay for this protection.
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Moreover, the Union has highlighted issues related to differential treatment to savings via life insurance, the reintroduction of the IT deduction for health insurance premiums, and the amalgamation of public and sector general insurance companies.
In his letter, Gadkari has implored Sitharaman to prioritize these suggestions, particularly as the GST on insurance premiums becomes onerous for senior citizens.
Gadkari represents the Nagpur constituency in the Lok Sabha.
The GST council which makes the tax decisions is set to meet in August after the last meeting in June.
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