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In response to widespread criticism of the 2024 Budget, Union Minister Nitin Gadkari has proposed to Finance Minister Nirmala Sitharaman that the Goods and Services Tax (GST) on life and medical insurance premiums be revoked. This suggestion follows a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union, which argued that the 18% GST on these premiums hampers sector growth and unfairly taxes those seeking financial security against life’s uncertainties.
In his letter, Gadkari conveyed the union’s concerns, stating, “Levying GST on life insurance premium amounts to levying tax on the uncertainties of life, which is unfair to individuals who seek to protect their families.” He also highlighted similar issues with medical insurance, where the GST acts as a significant deterrent to business expansion, which is crucial for societal welfare.
Additionally, the union pointed out the differential treatment in savings through life insurance and advocated for the reintroduction of income tax deductions for health insurance premiums. They also suggested consolidating public and private sector general insurance companies.
In his communication with Sitharaman, Gadkari urged prompt attention to these issues, emphasizing the financial strain on senior citizens and the broader implications for economic health and public welfare.
The budget has been further criticized by opposition parties, who claim that financial allocations favor states under NDA rule, and social media backlash highlights high taxes on the salaried class. However, Finance Minister Sitharaman has dismissed these accusations, asserting that the budget’s policies are aimed at long-term national development goals.
