Can we claim GST on health insurance?
Yes, we can claim GST on health insurance. Because under the section 80C and 80D of the Income Tax Act, 1961. In this act the taxpayers are allowed to claim the benefits of tax on the premiums paid for the health insurance plans. It is really very helpful to promote the habit of the investing in an insurance policy among the people. Therefore there are most of the people who are totally aware about the tax benefit on the premiums paid for the insurance. However they are unfamiliar with the similar benefits that are related to the GST paid on the insurance premiums. On the other hand we can say that the taxpayers can able to avail the tax benefit on insurance premiums as a whole, including the GST paid as per the policy.
While before anyone is buying the insurance policy, it is necessary to compare the prices that are included with the various policies. The top most things on the health insurance premium such as mortality amount, the insured person also needs to pay Goods and Services Tax (GST). It all depends on the type of the insurance policy that the amount of GST applicable.
Consequently the premium paid for the life and the medical insurance policies that can be used to claim the tax benefit under the Section 80C and Section 80D of the Income Tax Act.
What is the impact of the GST on Health Insurance?
We all know that after the implementation of Goods and Services Tax all the insurance schemes including health insurance come under the ambit of the Goods and Services Tax. It simply means that the premium you pay towards your medical insurance policy would attract an 18% GST. A person who avails services from a supplier is liable to pay GST along with the actual value of the service.
However after the implementation of the Gst there has been a hike in the proces of insurance premium for the buyers. From the earlier 15% service tax that they will now have to pay an additional amount that is based on the current rate.
Concept of GST on Health Insurance
The health insurance is today's times holds a great significance as far as the financial protection of the family that is concerned. So it is necessary for everyone to realize that by paying the premium with the additional GST charges that you are getting a health cover which is extensive in the nature and that helps to covers the medical expenditure that you are likely to incur.
In simple words the total amount that a person pays to buy and keep the medical insurance policy that also includes the GST paid on the premium. In the process of the GST calculation the percentage of the premium and can often be a substantial amount. So it is necessary to understand that how much the GST is applicable on life and the non life insurance premiums. GST paid with the basic insurance premium qualifies for getting tax benefit.
The amount of the GST, which is applicable to the basic premiums, in both the cases, can be claimed for getting tax saving deduction benefit under section 80D. In each and every case an individual can claim the total premium of Rs 9,255 or Rs 20,983 under section 80D. This tax saving deduction amount is subjected to an investment limit available under the particular section. Since the policy would cease to be active without the payment of GST, a taxpayer can automatically claim the entire amount, including GST as tax deduction under insurance policies. Make sure that you keep the documents related to premium payment, showing both GST and premium paid towards your insurance policy as a valid proof.