The GST Council may exempt term life insurance from paying taxes. How will this affect you personally?
Term life insurance may be exempt from GST by the GST Council; a formal decision is anticipated on September 9.
Term life insurance policies are probably going to be exempt from the goods and services tax (GST) by the GST Council. Nonetheless, it might still tax insurance plans that include an investing component. According to a top anonymous government official who spoke with Moneycontrol, the decision would probably be formally announced at the GST Council meeting on September 9.
“There will be no exemption for life insurance with an investing component. It makes no logic to provide such an exception. Essentially, it’s an investment. According to the publication, thTerm life insurance: what is it?e official stated, “We have to exempt investments from the uncertainties of life.”
He projected that the exemption of term life insurance from GST will result in an annual revenue loss of about ₹200 crore, but the decision will lower the cost of term life insurance in India, increasing its profitability.
This would be a positive development. Insurance would become more reasonably priced as a result, and insurance companies would see an increase in business. In comparison to other industrialized nations, India still has a low insurance penetration rate. This would undoubtedly assist close the gap, according to the report’s source, Sandeep Sehgal, partner-tax at AKM Global, a tax and consulting firm.
Term life insurance: what is it?
Term life insurance is a straightforward protection plan that provides beneficiaries with guaranteed money in the event that the policyholder passes away during the policy’s term. The insurance offers protection for a predetermined time frame of ten to thirty years.
What do term life insurance premiums entail?
Because term life insurance just provides a death benefit and has no savings or investment component, its premiums are typically lower. Unless the policy has a return of premium rider, there is no reimbursement if the policyholder lives out the term.
