With the 28th GST council meeting held recently in the month of July, there have been many changes that are going to impact you as a taxpayer. The GST or the Goods and Services Act was implemented in 2017 in order to have a simplified and uniform tax system applicable to all the goods and services marketed in the country. Since health insurance also comes under the category of service, the revised GST is going to impact health insurance for sure. Let’s find out how.
For starters, the good news is that health insurance does not come under the 28% GST bracket. Currently, only 35 items fall under this segment, and the insurance sector is not one of them. At the same time, the influence of GST on health insurance premium is likely to increase your expenditure to a certain extent. After July 1st the GST on health insurance, general insurance, car and life insurance, mutual funds and endowment plans has gone up by 3%. So, from now on the GST applicable to the insurance sector will come under the 18% bracket, and not the 15% one. Hence, your insurance premium charges are going to increase.
Not only the new policy applicants but, also the existing health insurance policyholders will witness a rise in their payable premium amount. To add to their woes health insurance policyholders will no longer be entitled to input tax credits, as the insurance is of an individual or personal benefit nature. Secondly, for the same reason, group or collective health insurance policies by companies will also no longer get the tax advantage.
With such drastic and rapid changes going on in the income tax scenario, it is only practical and wise to take the help of financial experts who can plan your health insurance in a beneficial manner despite the revised GST implications. For the best and the most pragmatic health insurance solutions get in touch with our financial advisers today at ManipalCigna Health Insurance. Click here for details and clarity on the impact of GST on health insurance because our health insurance plans give you comprehensive coverage both in illness and wellness.