Insurance

GST on health insurance premiums: Rate & how to calculate

By Tata Capital
15 September 2026
8 mins read
2785

The Goods and Services Tax (GST) for health insurance is an indirect tax levied on your medical insurance premium. Prior to 22 September, 2025, GST was charged at 18% on health insurance premiums, making policies costlier. However, following recent tax reforms, individual health policies and family floater plans are fully exempt, meaning 0% GST is charged on them, whereas employer-issued group/corporate policies still attract an 18% GST. The additional taxes are added to the total premium your employer pays for the health insurance policies.

GST on health insurance premiums is exempt for individual policies, while group and corporate health insurance plans continue to attract 18% GST.

What is GST on health insurance?

GST, or Goods and Services Tax, is a tax the government charges on services. Since a health insurance premium is treated as payment for an insurance service, GST was applied on top of it. Put simply, the GST amount wasn’t part of your base premium. It was an extra charge added on top. For several years, an 18% GST applied to health insurance premiums, which increased the overall cost of coverage.

That changed in September 2025. Today, the treatment depends on the type of policy you hold: individual health insurance is now GST-free, while group and corporate policies still carry 18% GST.

Read on to learn about the revised health insurance GST rate.

Also Read – GST on rent in India

What Is the Current GST Rate on Health Insurance

At a glance: individual, family floater, and senior citizen health insurance carry 0% GST (fully exempt), while group and corporate health insurance still carries 18% GST. This split has applied since 22 September 2025.

The type of policy determines how much GST is charged on health insurance premiums. No GST applies to individual health insurance plans. This includes family floater and senior citizen policies. However, there is an 18% GST charge on group or corporate health insurance plans.

The following table explains the health insurance GST rate as per the 2025 update:

Type of health insurance policy	GST rate
Individual health insurance	Nil (Exempt)
Family floater health insurance	Nil (Exempt)
Senior citizen health insurance	Nil (Exempt)
Group/corporate health insurance	18%

GST on Individual Health Insurance

The Government of India amended the GST rules on health insurance in September 2025. Since then, individual health insurance policies have been GST-exempt. This exemption includes individual plans, family floater policies, senior citizen health insurance, and individual top-up or super top-up plans. It applies to premiums paid on or after this date. It also includes renewals and reinstated policies. Moreover, reinsurance services related to these exempt individual health insurance policies are also GST-free.

Specifically, that exemption breaks down as:

New and renewal premiums: Covered from the date they’re paid, as long as that date falls on or after 22 September 2025.
Instalment premiums: Each instalment paid on or after the effective date is GST-exempt, even if the policy itself started earlier.
Reinstated policies: Premiums paid to reinstate a lapsed individual policy are exempt too, provided the payment falls on or after 22 September 2025.

Since GST treatment depends on the exact payment date, always check your policy document or premium invoice to confirm which rate has actually been applied.

Also Read – Input Tax Credit (ITC) under GST

GST on Group or Corporate Health Insurance

Despite the 2025 update, group and corporate health insurance policies provided by employers continue to attract GST at 18%.

This means GST is added to the premium paid for employee health coverage.

For example, if a company’s group health insurance premium is Rs. 1,00,000, the 18% GST adds Rs. 18,000, bringing the total payable to Rs. 1,18,000. In most employer-sponsored plans, the company bears this GST as part of the overall premium cost, though some employers pass on a share of it to employees through payroll deductions, depending on how the group policy is structured.

It is vital for businesses to note that Input Tax Credit (ITC) on employee health insurance is generally blocked under Section 17(5)(b) of the Central Goods and Services Tax (CGST) Act.

However, you may get ITC if providing such health cover is mandatory under any applicable law.

Also Read – Which is recommended, individual or corporate health insurance

The September 2025 GST exemption: What changed?

In September 2025, a major change came into effect when the GST Council reduced GST on individual health and life insurance from 18% to nil. The decision was made at the 56th GST Council meeting on 3 September 2025, and came into effect from 22 September 2025 through Notification No. 16/2025-CT(R).

The key changes include:

Removing GST from individual health insurance premiums
Making individual life insurance premiums GST-free

The amended GST for health insurance approach focused on supporting the “Insurance for All by 2047” vision. As a result, premiums are now lower because of no GST addition.

Here’s a quick before-and-after snapshot:

Policy type	Before 22 Sept 2025	After 22 Sept 2025
Individual / family floater / senior citizen	18% GST	Nil (Exempt)
Group / corporate	18% GST	18% GST (unchanged)
Reinsurance on exempt individual policies	18% GST	Nil (Exempt)

How to calculate GST on a health insurance premium?

Base premium = Payable amount

For example, if an individual policy’s premium is Rs. 15,000, you will pay Rs. 15,000 to the insurance company.

Total payable = Premium + 18% of the premium as GST

For example, if the premium for a group health insurance plan is Rs. 20,000, you will pay Rs. 3,600 (20,000 X 18%) as GST. So, the total payable will be Rs. 23,600 (20,000 + 3,600).

What is a GST calculation example?

Policy type	Premium (Rs.)	GST	Total payable (Rs.)
Individual	50,000	Nil	50,000
Group	50,000	9,000	59,000

Also Read – How to calculate GST on a home loan

Which premiums are exempt? Transition and timing rules

The applicability of GST on health insurance premiums depends on the timing rules specified under Section 14 of the CGST Act. These rules focus on when the supply is made, when the invoice is issued, and when the payment is received. Therefore, the date of premium payment is vital in determining whether GST applies.

Individual health premiums paid on or after 22 September 2025:

No GST applies to new policy premiums.
No GST applies to renewal premiums.
Instalment premiums are GST-exempt.
No GST applies to premiums paid for reinstated policies.

Individual health insurance premiums paid before 22 September 2025:

GST applies at 18%

Also Read – What Is GST on Personal Loan

What are the GST exemption and Section 80D tax benefits?

The GST exemption on individual health insurance and the tax deduction available under Section 80D are two separate benefits. You can continue to claim Section 80D deductions on eligible health insurance premiums as long as they are available in your tax regime and within prescribed limits. On the other hand, since no GST is charged on individual health insurance premiums paid on or after 22 September 2025, the amount you pay and potentially claim as a deduction is lower than before.

Note that tax rules vary based on your situation. You must consult a qualified tax advisor or financial professional before making tax-related decisions.

Also Read – What Is GST on Personal Loan

What is the impact of the GST exemption on policyholders?

Individual health insurance has become more affordable with GST exemption, as it reduces the total premium payable on new policies and renewals.

Since there is no GST on health insurance, individuals and families can save money while maintaining the same level of coverage.

However, group and corporate health insurance policies continue to attract 18% GST.

Thus, there is no change for employer-sponsored plans.

If you receive an insurance renewal notice after 22 September 2025, make sure you review it carefully to ensure the GST exemption has been applied correctly.

How to Reduce the Impact of GST on Health Insurance Premiums

Understanding GST on health insurance premiums in India comes down to one simple split: individual policies are exempt, group policies aren’t. Once you know how much GST on health insurance actually applies to your policy, a few smart choices can reduce the total amount even further.

Favour an individual or family floater plan over relying only on employer group cover, since group premiums still carry 18% GST. If your employer’s cover feels thin, top it up with your own individual super top-up plan rather than a second group-style policy, since that top-up is GST-exempt too.

Locking into a 2- or 3-year individual policy can also work in your favour, as insurers often price multi-year plans at a discount. Finally, compare a few insurers before buying, and remember that Section 80D deductions still apply on top of these savings.

Conclusion

GST for health insurance is an indirect tax that the government charges for the services an insurance company provides to you. However, its applicability has changed significantly after the GST Council meeting held on 3 September 2025. Earlier, insurance premiums attracted an 18% GST. But, effective 22 September 2025, GST charges depend on the type of policy. Individual and family floater insurance plans are GST-exempt, whereas 18% GST still applies to group/corporate health insurance plans. You must always check the latest GST rates and policy details through official GST notifications, government portals, or your insurer, as these can change from time to time.

FAQs

How much GST is charged on health insurance now?

The health insurance GST rate depends on the policy type. Individual health insurance policies are exempt from GST. However, group and corporate health insurance policies continue to attract GST at 18% on the premium amount.

Is GST applicable to individual health insurance in 2026?

No, GST does not apply to individual health insurance, including family floater and senior citizen plans, in 2026. This means no GST is charged on eligible individual health insurance premiums as long as the GST Council doesn’t make changes to the exemption.

Do group health insurance policies still attract GST?

Yes, group health insurance policies provided by employers or organizations still attract GST. The rate is set at 18%. It is added to the premium amount payable for the group insurance cover.

When is health insurance GST-exempt?

Individual health insurance is GST-exempt from 22 September 2025. The decision was made via Notification No. 16/2025-CT(R) in the GST Council meeting held on 3 September 2025. The exemption applies to eligible premiums paid on or after this date, including new policies, renewals, installments, and reinstated policies.

Are renewal premiums exempt from GST?

Yes. Renewal premiums for eligible individual health insurance policies are exempt from GST if they are paid on or after 22 September 2025. However, if the premiums are paid before that date, they continue to attract 18% GST as per the earlier GST rules.

How do I calculate GST on a group health insurance premium?

The GST on medical insurance premiums for group plans is calculated at 18% of the premium amount. So, if the group medical insurance premium is Rs. 1,00,000, the GST is Rs. 18,000 (1,00,000 X 18%), and the total amount payable is Rs. 1,18,000 (1,00,000 + 18,000).

Does the GST exemption affect my Section 80D deduction?

No, the GST exemption has no impact on your Section 80D deduction. They are separate benefits. You can continue claiming Section 80D deductions as per the application conditions, tax regime, and deduction limits.

How does GST exemption affect the total health insurance premium payable?

For individual health insurance, GST exemption means the premium you pay is exactly the base premium, since no GST is added to it. This can lower your total payable by what would have been an 18% addition, making individual cover cheaper than before 22 September 2025.

Is GST applicable to health insurance add-ons and riders?

Riders and add-ons attached to an individual health insurance policy generally follow the same GST treatment as the base policy. So they're typically GST-exempt when bundled with an eligible individual plan bought or renewed on or after 22 September 2025. Riders sold with a group policy still attract 18% GST. Check your policy schedule to confirm.

What happens to GST if I make changes to my health insurance policy?

If you make a mid-term change that involves an additional premium payment, such as increasing your sum insured or adding a family member, the GST treatment follows the date that additional payment is made. For an eligible individual policy, it stays exempt; for a group policy, the usual 18% applies.

Does GST exemption apply to family floater health insurance policies?

Yes. Family floater health insurance policies are treated the same as individual policies under the GST exemption. Premiums paid for family floater plans on or after 22 September 2025 are fully GST-exempt, whether for a new policy, a renewal, or an instalment payment.

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