--- title: "New GST on Insurance Premium 2026: 0% / 18% Rate on Life Insurance" description: "New GST rate on insurance premiums in 2026 is 0% on individual life and health policies and 18% on group. Busy auto-applies the right GST slab on every invoice." canonical: "https://busy.in/gst-rates/insurance-premium/" author: "Madan Murari" published: "2025-05-05T06:49:42.000Z" category: "GST Rates" --- - Individual life insurance policies and individual health insurance policies are exempt from GST from 22 September 2025, subject to applicable conditions. - General insurance services, including motor and property insurance, continue to attract **18% GST**. - Before 22 September 2025, life insurance premiums generally attracted GST based on the type of policy structure, while health and general insurance services were generally taxed at 18%. - Input Tax Credit (ITC) availability on insurance services depends on the nature of the policy, business use, and applicable GST provisions. - Personal insurance policyholders cannot claim GST refunds on premiums pa # New GST on Insurance Premiums: Life, Health, and More Insurance offers peace of mind during life’s uncertainties—but it also comes with taxes that often go unnoticed. Under the Goods and Services Tax (GST) regime in India, different insurance products—like life, health, and general insurance—attract varying tax rates. In this blog, we’ll explain the GST on insurance premiums, including rates for different policies, applicable [**HSN codes**](https://busy.in/hsn/) , [**input tax credit rules**](https://busy.in/gst/complete-guide-to-input-tax-credit-under-gst-in-india/) , and more. ## **New GST Rate on Insurance in India** The revised GST treatment for insurance services is applicable from **22 September 2025**. Below are the applicable GST rates for common insurance categories (no compensation cess applicable). | Type of Insurance | New GST Rate | | --- | --- | | Individual life insurance policies | **Exempt (subject to applicable conditions)** | | Individual health insurance policies | **Exempt** | | General insurance (motor, property) | **18%** | ## **Old GST Rate on Insurance Premiums** **(Old GST Rates – Applicable Until 21st September)** The GST on insurance premiums was levied based on the type of insurance policy: | Type of Insurance | GST Rate | | --- | --- | | Life Insurance | **Applicable GST rate depended on the policy structure and premium component** | | Health Insurance | **18%** | | General Insurance (motor, property) | **18%** | The GST rate for life insurance varied depending on the policy type and the proportion of premium allocated towards risk coverage and other components. Live Demo Available Today ## Calculate Interest on Overdue Insurance Premium Receivables Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **GST Structure for Life Insurance** **(Old GST Rates – Applicable Until 21st September)** Life insurance GST varied according to the type of policy and premium structure: 1. **First-year premium (traditional plan):** 4.5% GST 2. **Renewal premiums:** 2.25% GST 3. **Single premium life policy (risk cover only):** 18% GST ULIPs (Unit Linked Insurance Plans) and endowment plans involving investment components were taxed based on applicable service charges and policy components. ## **HSN Code for Insurance Services** Insurance services are classified under **HSN/SAC Code 9971** (financial and related services). More specifically: | Insurance Type | HSN Code | Old GST Rate | | --- | --- | --- | | Life Insurance | 997131 | **Applicable GST rate depended on policy structure** | | Health Insurance | 997133 | **18%** | | Motor/Property Insurance | 997132 | **18%** | These codes help classify insurance services for GST compliance and documentation. ## Can You Claim Input Tax Credit (ITC) on Insurance? ##### Businesses: - Can claim ITC on **general insurance** (like fire or asset insurance) if used for business purposes. - Can [**claim ITC**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on **health insurance** only if it’s mandatory by law or contractual obligation. - Cannot claim ITC on **life insurance** premiums unless used as a taxable service. ##### Individuals: - **Cannot claim ITC** on personal insurance premiums. ## **How GST Affects Policyholders** - Individual life insurance and individual health insurance policyholders do not pay GST on eligible policies from **22 September 2025**. - General insurance policies, such as motor and property insurance, continue to attract **18% GST**. - Personal policyholders generally cannot claim GST refunds on insurance premiums paid. **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## **Final Thoughts** Whether you’re insuring your life, health, or property, understanding GST on insurance services helps businesses and individuals stay informed about applicable tax treatment. From **22 September 2025**, eligible individual life insurance and individual health insurance policies are exempt from GST. General insurance services, such as motor and property insurance, continue to attract **18% GST**. For businesses, understanding **Input Tax Credit (ITC)** eligibility on insurance expenses can help manage tax costs where applicable. Always check policy details and maintain proper GST documentation for compliance. ## About the author **Madan Murari** Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone! ## Frequently asked questions ### What is the GST rate on life insurance premiums? Eligible **individual life insurance policies are exempt from GST from 22 September 2025**, subject to applicable conditions. ### Is GST applicable on health insurance premiums? Eligible **individual health insurance policies are exempt from GST from 22 September 2025**, subject to applicable conditions. ### Can a salaried individual claim ITC on insurance premiums? No, **ITC is not available** for personal insurance policies. ### How does GST affect insurance claims? GST is applicable only on the **premium paid**, not on claim payouts. ### What is the HSN code for health insurance? **997133** is the HSN code for health insurance under GST. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)