New Delhi, 31st July : In the wake of widespread criticism of Budget 2024, Union Minister and senior BJP leader Nitin Gadkari has appealed to Finance Minister Nirmala Sitharaman to remove the GST levied on premiums for life and medical insurance plans.
In his letter, Mr. Gadkari mentioned that he was prompted to write to the Finance Minister following a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union. The union's primary concern is the 18 percent GST imposed on both life and medical insurance premiums. Mr. Gadkari emphasized that taxing life insurance premiums is akin to taxing life's uncertainties.
"The union believes that individuals who insure against life’s uncertainties to protect their families should not be taxed on the premiums they pay. Similarly, the 18% GST on medical insurance premiums is a barrier to the growth of this vital sector, which is essential for societal welfare. Therefore, they have called for the removal of GST," Mr. Gadkari wrote.
He also noted that the union raised other issues, such as the differential treatment of savings through life insurance, the re-introduction of income tax deductions for health insurance premiums, and the consolidation of public and private sector general insurance companies.
Mr. Gadkari urged the Finance Minister to prioritize the consideration of these suggestions, particularly the removal of GST on life and medical insurance premiums, as it is especially burdensome for senior citizens.
Mr. Gadkari’s letter comes amid significant criticism of the first Budget of the third Narendra Modi government. While the Opposition accuses the Centre of favoritism towards states ruled by key allies TDP and JDU, social media has highlighted the high tax rates for salaried individuals. The Finance Minister has dismissed these accusations, asserting that funds have been allocated to all states. She clarified that the absence of a state's name in the Budget speech does not imply exclusion. The BJP maintains that the Budget aims for a long-term goal of making India a developed nation by 2047.