Under Section 80D, one can save tax based on the premiums paid on health and life policies. But, what about the Goods and Services Tax (GST) that is paid on these premiums? Can a taxpayer also claim deduction on the GST paid on these premiums?
Well, the answer is yes. According to experts, tax benefits on insurance premiums include GST. The tax saving deduction amount is, however, subjected to an investment limit available under the particular section.
When an individual pays a premium for a life or health policy, he/she is also required to pay GST, which is calculated as a percentage of the policy. On health insurance, 18 percent GST is charged on the premiums paid as per the current regulations.
Tax experts advise employees to claim GST paid on premiums to reduce taxable income, and hence save tax. Employees should keep the documents related to the premium payment, reflecting GST and premium paid towards insurance policies as proof.