New GST on Health Insurance in India: A Complete Guide
- From 22 September 2025, specified individual health insurance policies, including family floater and senior citizen health insurance policies, are exempt from GST.
- Before this exemption, health insurance premiums generally attracted 18% GST under the applicable insurance classification.
- GST treatment for health insurance depends on the type of policy and applicable GST provisions.
- Input Tax Credit on insurance services depends on the nature of the policy, business use and applicable GST conditions.
- GST applicability on insurance premiums is separate from income tax deductions available under Section 80D.
Medical insurance is an important tool for protecting yourself and your family from high healthcare costs. But did you know that even insurance premiums are taxed under the Goods and Services Tax (GST)? In this article, we’ll explain the GST rate on medical insurance, the HSN code used, how it impacts your premium, and what it means for both individuals and businesses.
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New GST Rate on Health Insurance & Personal Accident Insurance in India
The revised GST treatment applicable from 22 September 2025 is provided below for health and personal accident insurance products (no compensation cess applicable).
| Type of Insurance | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|
| Individual health insurance policies (including family floater and senior citizen policies) | 0% (Exempt) | 18% |
| Medical/health insurance other than specified exempt individual policies | Applicable GST rate based on classification | 18% (generally) |
| Critical illness plans (standalone policies) | Applicable GST rate based on classification | 18% (generally) |
| Personal accident insurance plans | Applicable GST rate based on classification | 18% (generally) |
| Group health insurance policies | Applicable GST rate based on applicable provisions | 18% (generally) |
Type of Insurance
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Type of Insurance
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Type of Insurance
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Type of Insurance
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Type of Insurance
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Note: Individual health insurance policies, including family floater and senior citizen health insurance policies, are exempt from GST from 22 September 2025. Group health insurance and other insurance products continue to follow the GST treatment applicable to their classification.
SAC Code for Health Insurance Services
The SAC code for health insurance services is 997133. This code is used for classifying health insurance services under GST.
| Service Description | SAC Code | GST Treatment |
|---|---|---|
| Health insurance services | 997133 | GST treatment depends on the type of insurance policy and applicable GST provisions |
Service Description
SAC Code
GST Treatment
Note: SAC 997133 is used for classification of health insurance services. GST applicability depends on the nature of the insurance policy and applicable GST provisions.
Issue Credit Notes for Medical Insurance Policy Adjustments
* No credit card required
GST Impact on Premium Calculation
Let’s say your annual individual health insurance premium is ₹25,000.
- GST @0% = ₹0
- Total Premium Payable = ₹25,000
This means eligible individual health insurance policyholders do not pay GST on premiums from 22 September 2025.
Who Pays the GST on Insurance?
- Individual Policyholders: If you’re buying health insurance for personal use, you will pay the GST as part of your premium.
- Employers / Businesses: Companies providing group health insurance to employees also pay GST, but they may be eligible to claim Input Tax Credit (ITC) under certain conditions.
Can You Claim Input Tax Credit (ITC) on Medical Insurance?
For Businesses:
Businesses can claim ITC on medical insurance if:
- The insurance is mandated under any law (like ESIC or for employee safety).
- It is provided as a statutory requirement or as part of the employee contract.
However, if it’s offered as a voluntary employee benefit, ITC is not allowed.
For Individuals:
If you’re buying insurance for yourself or your family, you cannot claim ITC as it’s a personal expense.
Does GST Apply to Premiums Paid Under Section 80D?
Yes, GST is included in the premium amount you pay, even if you’re claiming a deduction under Section 80D of the Income Tax Act. However, the tax portion is also included in the eligible deduction.
For example:
- Premium: ₹25,000
- GST: ₹4,500
- Total Paid: ₹29,500
- Deduction under 80D: ₹29,500 (full amount)
Why is GST Charged on Medical Insurance?
GST applicability on medical insurance depends on the type of insurance policy. From 22 September 2025, individual health insurance policies are exempt from GST, while other insurance products continue to be taxed as per their applicable GST classification.
Final Thoughts
Health insurance provides financial protection during medical emergencies. From 22 September 2025, specified individual health insurance policies, including family floater and senior citizen health insurance policies, are exempt from GST. Before this exemption, health insurance premiums generally attracted 18% GST.
GST treatment may differ for other insurance products, such as group health insurance or commercial policies, based on applicable GST provisions. Businesses should evaluate Input Tax Credit eligibility based on the nature of the policy and applicable GST conditions.
Regardless of GST applicability, health insurance remains an important financial protection tool to manage unexpected medical expenses.
