Since 22 September 2025 (GST 2.0), all individual life and health insurance premiums are exempt — 0% GST. This covers term, endowment, ULIP, family floater and senior-citizen plans. Motor, fire, marine, travel and property insurance still attract 18%, and group/employer policies also remain at 18%. Earlier, individual life and health cover was taxed at 18% — that GST is now removed.
GST on Insurance — Decision Table
The current GST position for every common insurance product in India after the 22 September 2025 exemption, with ITC treatment.
| Insurance Type | GST | Rate | ITC |
|---|---|---|---|
| Individual term life insurance | No | Exempt | — |
| Individual endowment / traditional life | No | Exempt | — |
| Individual ULIP | No | Exempt | — |
| Individual / family health (Mediclaim) | No | Exempt | — |
| Senior-citizen health insurance | No | Exempt | — |
| Critical illness (individual) | No | Exempt | — |
| Group / employer health & life | Yes | 18% | Blocked* |
| Motor / vehicle insurance | Yes | 18% | Blocked* |
| Fire & property insurance | Yes | 18% | Yes** |
| Marine insurance (goods in transit) | Yes | 18% | Yes |
| Travel insurance | Yes | 18% | — |
| Crop insurance (PMFBY) | No | Exempt | — |
| PMJJBY / PMSBY (govt schemes) | No | Exempt | — |
Individual life & health exemption is effective 22 Sep 2025 (56th GST Council). *Blocked for personal/employee benefit under Sec 17(5). **Where used for business assets. Confirm on the official GST portal before relying on any rate.
Exempt or Still 18%?
Two things decide it: is the policy an individual life or health cover (now exempt), and if not, it stays in the general 18% net.
Exempt from 22 Sep 2025
- Individual term & life insurance
- Endowment & ULIP (individual)
- Individual & family-floater health
- Senior-citizen health plans
- Reinsurance of these individual policies
Still taxable at 18%
- Motor / vehicle insurance
- Fire, property & marine insurance
- Travel insurance
- Group / employer health & life
- Corporate & keyman policies
The exemption applies only to individual life and health policies. Employer-sponsored group health or group term life continues to attract 18% GST — a common misconception after the reform. Motor and other general insurance are also unchanged at 18%.
Not sure whether your policy is exempt now?
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What Changed for Insurance
The 56th GST Council (3 September 2025) exempted all individual life and health insurance premiums, effective 22 September 2025. Until then these were taxed at 18%. The change is meant to make insurance more affordable and lift India's low insurance penetration.
- 1Before 22 Sep 2025Individual life & health taxed at 18%
- 256th GST CouncilExempted individual life & health
- 3From 22 Sep 20250% GST on these premiums
- 4UnchangedMotor, general & group stay 18%
How the Exemption Saves You Money
Health premium before
Health premium now
On a ₹20,000 individual health premium the exemption saves ₹3,600 a year. A ₹15,000 term-life premium similarly drops the ₹2,700 GST. Motor insurance sees no such saving — it still carries 18%.
Because these premiums are now exempt (not zero-rated), insurers cannot claim input tax credit on costs attributable to exempt policies. Some insurers may absorb this, so the customer's saving may be slightly under the full 18% — but the GST line on your individual policy is now nil.
Buying or renewing a policy? Check whether GST applies to your premium.
Ask a GST Expert →80C / 80D and ITC After the Exemption
Because individual life and health premiums are now exempt, there is no GST component to add to your Section 80D (health) or Section 80C (life) claim — you simply deduct the premium actually paid. Where a policy still carries 18% (motor, group), the GST paid is part of the amount but is not itself deductible under 80C/80D.
| Scenario | GST | ITC / Deduction |
|---|---|---|
| Individual health premium (80D) | Exempt | Deduct premium paid; no GST to add |
| Individual life premium (80C) | Exempt | Deduct premium paid; no GST to add |
| Business motor / marine insurance | 18% | ITC only where Sec 17(5) allows |
| Employee group health premium | 18% | ITC blocked under Sec 17(5) (usually) |
| Insurance on business plant & machinery | 18% | ITC eligible |
80D limit stays ₹25,000 (₹50,000 if senior citizen), plus ₹25,000/₹50,000 for parents. GST no longer inflates the individual premium.
- Individual policyholders: your premium invoice now shows no GST line from 22 Sep 2025.
- Businesses: ITC on insurance remains governed by Section 17(5) blocked-credit rules — marine on goods and insurance on plant/machinery are eligible; life, employee health and personal-use vehicle cover are generally blocked.
- Motor cover: 18% continues, so factor it into your renewal cost.
- Rates & notifications: gst.gov.in
- CBIC-GST: cbic-gst.gov.in
- Exemption: 56th GST Council (3 Sep 2025), CBIC notification eff. 22 Sep 2025
- ITC blocks: Section 17(5), CGST Act 2017
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.