• Notification Date: 13-01-2025
• Notification No: N/A

Budget 2025: Insurance industry seeks GST cuts, tax breaks to raise sales

The insurance sector is eagerly waiting for the Union Budget of 2025 so that it becomes accessible and affordable at the same time. Industry leaders would like the Goods and Services Tax (GST) on health and term insurance products to be eased specifically for the purpose of being broad in relation to the adoption of insurance in India, which is an approach they have been speaking of and searching for quite a long time.

Currently, the GST on the life insurance premiums is 18%. And this reduction in rate will reduce the cost of insurance policy and this will make an easily affordable thing to the common man. "There is utmost need for reduction or even exemption of GST on health and term insurance products to improve coverage for more uninsured population.”

In addition to GST-related reforms, the insurance industry seeks better tax benefits, including an increase in the tax deduction limit under Section 80C for life insurance premiums and raising limits under Section 80D for health insurance. As it caters to a large population, the proposal is to raise the health insurance deduction limit to Rs. 50,000 for individuals and Rs. 100,000 for senior citizens.

In addition, the insurance sector is collecting for reforms to make regulatory compliance more streamlined and bring standard developments in customer service. It is suggested that insurance products must be made available more pervasively through intermediaries and online access should be increased at special attention to rural areas as a channel to drive adoption.

The vision is that, even though by then, private insurers are to engender more business opportunity access through creating an effective health regulator to contain rising health expenses with "Insurance for All by 2047", initiatives like Bima Sugam, and Bima Vahak are now considered geared towards creating a more strong and financially inclusive India.