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GST on Health Insurance: Now Exempt
From 22 September 2025, premiums for individual health insurance, including family floater and senior citizen policies, are exempt from GST. Before that they carried 18% GST. Group health insurance and general insurance such as motor still attract 18%.
Applicable GST Rate
Individual health insurance premiums, including family floater and senior citizen plans
Health Insurance GST rate chart
| Item or service | HSN / SAC | GST |
|---|---|---|
| Individual health insurance (including family floater and senior citizen plans) | SAC 9971 | Exempt (0%) |
| Individual life insurance (term, ULIP, endowment) | SAC 9971 | Exempt (0%) |
| Reinsurance of individual health and life policies | SAC 9971 | Exempt (0%) |
| Group health insurance (for example employer policies) | SAC 9971 | 18% |
| Motor, fire, marine, travel and other general insurance | SAC 9971 | 18% |
What changed on 22 September 2025
The 56th GST Council meeting recommended exempting individual life and health insurance, and Notification No. 16/2025-Central Tax (Rate) put it into effect from 22 September 2025. Before this, individual health premiums attracted 18% GST.
The payment date decides the treatment. A premium or instalment paid on or after 22 September 2025 carries no GST; GST already paid on earlier premiums is not refunded.
Example: premium before and after the exemption
A family floater policy with a base premium of ₹25,000 cost ₹29,500 with 18% GST (₹4,500 GST). After the exemption, the same base premium costs ₹25,000 with no GST.
Insurers can no longer claim input tax credit on these exempt policies, so some have revised their base premiums. Expect the saving to be somewhat less than the full 18% at renewal.
Section 80D and group policies
Under the old tax regime you can still claim the deduction for health insurance premiums under Section 80D; it now applies to a premium without GST.
Group health policies taken by employers are not individual policies, so they continue at 18%.