GST on Insurance Premium — Health, Life & Motor Rates
Updated: 3 June 2026 | CGST Act | SAC 9971
GST on health insurance: 18%. Term life insurance: 18%. Endowment/money-back (1st year): 4.5%, renewals: 2.25%. PMFBY crop insurance: exempt. Section 80D deduction includes GST paid on health insurance premium. No ITC for individuals.
18% GST
Standard GST rate on health insurance and term life insurance premiums — SAC code 9971.
GST included in total premium is deductible under Section 80D (health) and Section 80C (life insurance), within applicable limits.
GST included in total premium is deductible under Section 80D (health) and Section 80C (life insurance), within applicable limits.
GST Rates on Different Insurance Types
| Insurance Type | GST Rate | SAC | Note |
|---|---|---|---|
| Health / Mediclaim insurance | 18% | 9971 | 80D deduction includes GST |
| Term life insurance | 18% | 9971 | Pure risk cover |
| Endowment / money-back (1st year) | 4.5% | 9971 | Savings + risk component |
| Endowment / money-back (renewal) | 2.25% | 9971 | — |
| ULIP charges | 18% | 9971 | On mortality + fund mgmt charges |
| Single premium annuity / pension | 1.8% | 9971 | — |
| Motor vehicle insurance (third party) | 18% | 9971 | — |
| Motor vehicle insurance (comprehensive) | 18% | 9971 | — |
| Marine / fire / commercial insurance | 18% | 9971 | ITC available for businesses |
| Crop insurance (PMFBY, govt scheme) | 0% (Exempt) | — | Government subsidized |
| Cattle / livestock insurance | 0% (Exempt) | — | — |
Frequently Asked Questions
What is the GST rate on health insurance premium?
GST on health insurance premium: 18% GST on health/medical insurance premiums (SAC 9971). This applies to all health insurance policies — individual, family floater, senior citizen policies. Budget 2024 proposal: Finance Minister proposed reducing GST on health and term life insurance — but GST Council has deferred this decision as of mid-2026; current rate remains 18%. Senior citizens: pay 18% GST on Mediclaim premiums; can claim full deduction of premium under Section 80D (including GST component). Input Tax Credit: individuals cannot claim ITC on insurance premiums paid for personal use.
What is the GST on life insurance premium?
Life insurance GST rates: Term insurance (pure risk cover): 18% GST on premium. Endowment/money-back (first year): 4.5% GST. Endowment/money-back (renewal years): 2.25% GST. ULIPs: 18% GST on charges (mortality charge, fund management charge). Single premium annuity plans: 1.8% GST. Pension plans: 1.8% GST. Why lower for endowment? The lower rate is because endowment/money-back premiums include savings component — only the risk/service portion is taxed at full rate. Section 80C deduction: entire premium (including GST) qualifies for 80C deduction up to ₹1.5 lakh.
Can I claim deduction on insurance premium including GST under Section 80D?
Yes — Section 80D deduction includes GST paid on health insurance premium. Deduction limits: Self/family (below 60): ₹25,000 (including ₹5,000 preventive health check-up). Self/family (if any member is senior citizen): ₹50,000. Parents (below 60): additional ₹25,000. Parents (senior citizen): additional ₹50,000. Example: If annual health premium is ₹30,000 + ₹5,400 GST (18%) = ₹35,400 total paid. You can claim entire ₹35,400 under 80D (subject to ₹50,000 limit for senior citizen policy). Old regime: Section 80D available. New regime: Section 80D NOT available (deductions not allowed).
Is marine or fire insurance covered by GST?
Commercial insurance GST: Marine insurance (cargo insurance): 18% GST on premium. Fire and allied perils insurance: 18% GST. Motor vehicle insurance (third party): 18% GST. Motor vehicle insurance (comprehensive/own damage): 18% GST. Workmen's compensation insurance: 18% GST. Professional indemnity insurance: 18% GST. Crop insurance under government schemes (Pradhan Mantri Fasal Bima Yojana — PMFBY): EXEMPT from GST (government-subsidized crop insurance). Cattle/livestock insurance: Nil GST. ITC for businesses: Companies paying commercial insurance as business expense can claim ITC if used for taxable supply (not personal/blocked).
How is GST on insurance claimed back or deducted in ITR?
For individuals: No ITC refund on insurance — individuals are not registered under GST. Deduction under Section 80D: entire premium paid (including 18% GST) is deductible. For businesses (GST registered): Life insurance for employees: ITC blocked under Section 17(5)(b) — cannot claim ITC. Health insurance for employees: ITC blocked under 17(5)(b) — cannot claim ITC. Marine/fire insurance on business assets: ITC available as it is not blocked. Professional indemnity for business: ITC available. Key rule: ITC blocked for anything related to "health services" or "life insurance" for employees — these are listed in the blocked credit list.
Related Pages
◆ Available in 71 Cities
Gst On Insurance Premium Near You
Expert CA/CS assistance for gst on insurance premium across India. Click your city for local details.
→
New Delhi
→
Mumbai
→
Bengaluru (Bangalore)
→
Hyderabad
→
Chennai
→
Kolkata
→
Pune
→
Ahmedabad
→
Noida (UP)
→
Gurgaon (Gurugram)
→
Jaipur
→
Lucknow
→
Chandigarh
→
Surat
→
Kochi (Cochin)
→
Faridabad
→
Ghaziabad
→
Greater Noida
→
Panipat
→
Sonipat
→
Manesar (IMT)
→
Dharuhera
→
Mathura
→
Palwal
→
Agra
→
Kosi Kalan
→
Aligarh
→
Khair
→
Jewar (Noida International Airport)
→
Kanpur
→
Varanasi (Kashi)
→
Prayagraj (Allahabad)
→
Meerut
→
Bareilly
→
Moradabad
→
Gorakhpur
→
Firozabad
→
Saharanpur
→
Muzaffarnagar
→
Bulandshahr
→
Hapur
→
Karnal
→
Kurukshetra
→
Ambala
→
Hisar
→
Rohtak
→
Yamunanagar
→
Rewari
→
Bhiwani
→
Jodhpur
→
Udaipur
→
Kota
→
Ajmer
→
Bikaner
→
Ludhiana
→
Amritsar
→
Jalandhar
→
Patiala
→
Mohali (SAS Nagar)
→
Bathinda
→
Dehradun
→
Haridwar
→
Rudrapur
→
Shimla
→
Solan (Baddi-Barotiwala-Nalagarh)
→
Bhopal
→
Indore
→
Gwalior
→
Jammu
→
Srinagar
→
Panchkula