New GST on Insurance Premiums: Life, Health, and More
- 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
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 , input tax credit rules , and more.
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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% |
Type of Insurance
New GST Rate
Type of Insurance
New GST Rate
Type of Insurance
New GST Rate
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% |
Type of Insurance
GST Rate
Type of Insurance
GST Rate
Type of Insurance
GST Rate
The GST rate for life insurance varied depending on the policy type and the proportion of premium allocated towards risk coverage and other components.
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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:
- First-year premium (traditional plan): 4.5% GST
- Renewal premiums: 2.25% GST
- 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% |
Insurance Type
HSN Code
Old GST Rate
Insurance Type
HSN Code
Old GST Rate
Insurance Type
HSN Code
Old GST Rate
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 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.
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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.
