Rakesh Jain, CEO, Reliance General Insurance
In spite of pandemic, the health insurance penetration in our country is very low.
Due to such a low coverage, the cost of insurance becomes high. In order to bring down its cost, GST rate should be reduced to 5% from 18%.
Currently, health insurance premium paid to cover individual members are allowed a deduction ranging from Rs. 25000 to Rs. 50000/- It is requested that in view of the inflation, the current limit of maximum of Rs. 50000/- may be increased to Rs. 100000 in order to induce people to take adequate cover of insurance.
Further, deduction of health insurance premium u/s 80D should also be allowed under the new tax regime.
The benefit of a reduced tax rate of 10% on long-term capital gain (LTCG) above Rs 1 Lac should also be extended to the insurance sector.
Also, premium paid for Home Insurance against the risk of various disasters should be given as a tax incentive by way of deduction under Chapter VI A to promote Home Insurance.
These will give relief to the existing policyholders and encourage our uninsured citizens to protect themselves with an insurance. Especially for the health insurance sector, it will help improve propensity of Indian population to avail timely healthcare thereby paving a way for a healthier country that is vital to our nation’s long-term prosperity.
Implementation of these tax benefits will also increase affordability of insurance products and augment insurance penetration in the country, giving a much-needed boost to the insurance sector.
Additionally, 5% GST is charged on room rents exceeding Rs. 5,000 per day by clinical establishments.
Insurance companies, while settling health insurance claims, are required to include such GST in the settlement amount. A clarification is required as to whether such GST is available as Input Tax Credit to insurance companies.”