States get nearly 3/4th of GST on health insurance, says Sitharaman

Flexible LTCG for realty, other amendments in Finance Bill approved by LS [View in browser]( [See all newsletters]( 08 August 2024 States get nearly 3/4th of GST on health insurance, says Sitharaman [Finance Minister Nirmala Sitharaman addressing the Lok Sabha during the Monsoon session of Parliament, in New Delhi on Wednesday] Finance Minister Nirmala Sitharaman on Wednesday said that States receive almost 3/4th of the revenue collected through GST on insurance. Responding to ongoing debate and criticism of the Centre levying GST on health insurance, Sitharaman said the Opposition parties should address their concerns on the issue to finance ministers of respective States where they are in power. Speaking in Parliament, the FM simultaneously announced changes in provisions related to Long Term Capital Gains (LTCG) for real estate, along with 45 amendments to the Finance Bill. Later the Lok Sabha approved the Finance Bill with all the proposed amendments. GST on Insurance Earlier, during the debate on the Finance Bill, almost the entire Opposition raised concerns about the 18 per cent GST on premiums for life insurance and health insurance. Protests were held outside the House on the same issue. The Finance Minister responded to the protests by asserting that even before GST rollout, States had levied tax on insurance premiums. “Out of the 18 per cent GST on medical insurance, nearly half goes directly to the states. Of the remaining half, 41 per cent moves into the devolution pool which also goes to States. This means more than ₹74 out of every ₹ 100 collected go to the States,” she said, dismissing allegations that money collected through GST is “pocketed” by the Centre. Further, the FM said the Parliament is not the right forum to decide about GST, but the GST Council. Also, the issue of GST on insurance has been discussed as many as three times in the GST Council, yet this debate still keeps surfacing. LTCG norms for realty Sitharaman moved an amendment to the Long Term Capital Gains provision for the realty sector by making it flexible. In the case of transfer of a long-term capital asset, being land or building or both, by an individual or HuF, which is acquired before the 23rd day of July 2024, the taxpayer can compute his taxes under the new scheme [@12.5 per cent without indexation] and old scheme [@20 per cent with indexation] and pay such tax as is lower of the two. “There was no revenue consideration for removing indexation. It was only for simplification. Still, we yielded to people’s response,” she said while justifying the amendment. Also, she clarified that there is no change in the rollover provision, which means if gains up to ₹10 crore are invested in one or two properties within a stipulated period, or in bond or section 54EC instrument up to ₹50 lakhs, then there will not be any tax. Commenting on the amendment, Shishir Baijal, Chairman and Managing Director of Knight Frank said, “While the 12.5 per cent rate may seem immediately attractive, the decision to opt for it or the 20 per cent rate with indexation should be made after careful consideration of individual circumstances. Ideally, if a property’s value has significantly outpaced inflation, the 12.5 per cent rate might be more beneficial. However, indexation could be advantageous in cases where property appreciation is closer to the inflation rate.” Anuj Puri, Chairman of ANAROCK Group said the revision can potentially stimulate the residential property market because it provides clarity and implies potential tax burden reduction. “Homebuyers’ sentiment will improve as they have flexible options for addressing their future capital gains tax burden. This will result in higher demand, particularly in markets where property values have been seen to rise significantly,” he said. You Might Also Like [Indian companies in Bangladesh face revenue hit due to political turmoil]( [National]( [Indian companies in Bangladesh face revenue hit due to political turmoil]( [Bank privatisation, import tariff cuts will give fillip to India’s developed country goal: Finance Commission Chief Arvind Panagariya]( [Economy]( [Bank privatisation, import tariff cuts will give fillip to India’s developed country goal: Finance Commission Chief Arvi...]( [Microsoft emerges top employer to work for in India: Randstad]( [News]( [Microsoft emerges top employer to work for in India: Randstad]( [Customs duty cut on gold can check smuggling]( [Data Stories]( [Customs duty cut on gold can check smuggling]( Stay informed Subscribe to businessline to stay up-to-date with in-depth business news from India [arrow]( Copyright @ 2024, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](