New GST on Insurance Premiums: Life, Health, and More
- Specified 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% GST.
- 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 paid for their personal insurance policies.
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 along with the rates applicable before 22 September 2025.
| Type of Insurance | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|
| Individual life insurance policies | Exempt (subject to applicable conditions) | 4.5% on first-year premium, 2.25% on renewal premium, and 18% on single premium risk-cover policies, as applicable |
| Individual health insurance policies | Exempt | 18% |
| General insurance (motor, property) | 18% | 18% |
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Note: Before 22 September 2025, life insurance premiums were taxed based on the type and structure of the policy, with GST generally applicable on the taxable portion.
The September 2025 reform provided exemption for specified individual life insurance and individual health insurance policies, subject to applicable conditions. General insurance services, including motor and property insurance, continue to attract 18% GST.
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GST Structure for Life Insurance
(New GST Rates – Applicable From 22 September 2025)
From 22 September 2025, GST exemption applies to specified individual life insurance policies, subject to applicable conditions.
| Life Insurance Policy Type | GST Rate From 22 Sep 2025 |
|---|---|
| Individual life insurance policies | Exempt |
| ULIPs (Unit Linked Insurance Plans) | 18% GST on applicable charges/components |
| Group life insurance policies | 18% GST (where taxable) |
| Other life insurance products | 18% GST on applicable taxable components |
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GST Rate From 22 Sep 2025
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Note: The GST exemption from 22 September 2025 applies to specified individual life insurance policies. ULIPs and other life insurance products with taxable service components continue to attract GST on the applicable charges or components.
HSN/SAC Code for Insurance Services
Insurance services are classified under SAC Code 9971 (financial and related services). More specifically:
| Insurance Type | SAC Code | GST Rate From 22 Sep 2025 |
|---|---|---|
| Individual life insurance policies | 997131 | Exempt (subject to applicable conditions) |
| Health insurance | 997133 | Exempt (subject to applicable conditions) |
| Motor insurance | 997132 | 18% |
| Property insurance | 997132 | 18% |
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GST Rate From 22 Sep 2025
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These SAC codes help classify insurance services for GST compliance and documentation. The applicable GST treatment depends on the type of insurance service and exemption conditions.
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.
