New GST on Health Insurance in India: A Complete Guide
- From 22 September 2025, individual health insurance policies, including family floater and senior citizen health insurance policies, are exempt from GST.
- Before the exemption, health insurance premiums generally attracted 18% GST as per applicable insurance classification.
- Health insurance services are classified under SAC 997133 for GST purposes.
- Businesses may claim Input Tax Credit on eligible insurance services subject to applicable GST conditions and restrictions.
- 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 in India
The revised GST rates applicable from 22 September 2025 are provided below for health and personal accident insurance products (no compensation cess applicable). Department of Financial Services
| Type of Insurance | New GST Rate |
|---|---|
| Medical / Health Insurance (individual policies) | 0% (Exempt) |
| Critical Illness Plans (standalone policies) | Applicable GST rate based on classification |
| Personal Accident Plans | Applicable GST rate based on classification |
Type of Insurance
New GST Rate
Type of Insurance
New GST Rate
Type of Insurance
New GST Rate
Individual health insurance policies, including family floater and senior citizen health insurance policies, are exempt from GST from 22 September 2025. Group health insurance policies continue to attract GST as per applicable provisions.
What is Old GST on Health Insurance?
Before 22 September 2025, health insurance premiums generally attracted 18% GST under the applicable GST classification.
| Type of Insurance | GST Rate |
|---|---|
| Health / Medical Insurance | 18% |
| Critical Illness Plans | Applicable GST rate based on classification |
| Personal Accident Plans | Applicable GST rate based on classification |
Type of Insurance
GST Rate
Type of Insurance
GST Rate
Type of Insurance
GST Rate
HSN Code for Medical Insurance
The HSN/SAC Code for health insurance services is 997133. This code falls under the broader category of financial and related services under GST.
| Service Description | HSN Code | GST Rate |
|---|---|---|
| Health Insurance Services | 997133 | Applicable GST rate depends on the type of insurance policy and applicable GST provisions |
Service Description
HSN Code
GST Rate
Insurance companies use this code on invoices and policies to classify insurance services under GST.
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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
While medical insurance provides financial safety during health emergencies, the addition of 18% GST increases the premium payable. Though businesses can recover some of this cost through ITC, individuals cannot. That said, it’s still wise to invest in health insurance—GST or not—because the cost of being uninsured is far higher
