New GST Rates Unlock More Savings

• GST overhaul slashes rates on cars, insurance, appliances, and essentials.
• Families can now save from a few thousand to over a lakh annually.
• The move aims to boost household spending and economic growth.

Starting today, India’s middle class will feel a direct relief in their pockets as the government’s 2025 GST reforms take effect. The sweeping changes reduce taxes on cars, daily essentials, insurance, and electronics, allowing families to save thousands each year.

For car buyers, the changes are game changing. Small petrol and diesel cars that earlier attracted 28% GST will now face only 18%, with the extra surcharge completely scrapped. That means savings of up to Rs 1.07 lakh on hatchbacks like the Maruti Alto K10. Even on a Rs 5 lakh car, buyers can save Rs 40,000-Rs 50,000. Lower insurance and road tax, linked to reduced ex-showroom prices, add another Rs 6,000-Rs 7,000 in savings.

Insurance costs are also dropping sharply. With GST on life and health insurance fully removed, policyholders save 18% instantly. A family paying Rs 20,000 annually for health insurance will now save Rs 3,600. Term insurance worth Rs 10,000/year saves Rs 1,800 more.

Everyday essentials too have become lighter on the wallet. Items like soaps, toothpaste, biscuits, and dairy now fall under a 5% GST slab. For a household spending Rs 5,000 per month, this translates into annual savings of at least Rs 3,000. Many staples such as paneer, khakra, and roti are now fully GST free.

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Electronics and home appliances also see a cut, with GST dropping from 28% to 18%. The price of Rs 30,000 refrigerator has been reduced to Rs 27,600, offering buyers a saving of Rs 2,400.

With these reforms, the government is signaling a renewed focus on boosting household consumption and sparking growth through higher savings and spending power.