From 22 September 2025, all individual life and health insurance premiums are GST-exempt (0%) — this covers term plans, endowment, money-back, ULIPs, individual annuities and health/Mediclaim policies. Motor, marine, fire and other general insurance stays at 18%, and group / employer / corporate policies also remain at 18%. Premium deductions under Section 80D (health) and 80C (life) continue on the amount actually paid.
GST Rate on Insurance — Decision Table
The GST rate for every common insurance type in India under the GST 2.0 structure, with the applicable SAC and ITC position.
| Insurance Type | GST Rate | ITC | Notes |
|---|---|---|---|
| Individual health / Mediclaim | 0% Exempt | N/A | Exempt since 22 Sep 2025 |
| Individual term life | 0% Exempt | N/A | Pure risk cover — now exempt |
| Individual endowment / money-back | 0% Exempt | N/A | Earlier 4.5% / 2.25% — now 0% |
| Individual ULIP charges | 0% Exempt | N/A | Mortality & fund charges exempt |
| Individual annuity / pension | 0% Exempt | N/A | Earlier 1.8% — now 0% |
| Group / employer health & life | 18% | Yes* | Corporate policies stay taxable |
| Motor insurance (TP & own-damage) | 18% | — | General insurance — SAC 9971 |
| Marine & cargo insurance | 18% | Yes* | Business asset cover |
| Fire & allied perils | 18% | Yes* | Business asset cover |
| Professional indemnity | 18% | Yes* | Business use — ITC eligible |
| Crop insurance (PMFBY) | 0% Exempt | — | Government-subsidised scheme |
*ITC only for GST-registered businesses using the cover for taxable supplies. Rates reflect GST 2.0 effective 22 September 2025 — confirm on the official GST portal before invoicing.
Insurance Went From 18% to 0% — What Changed
The 56th GST Council exempted all individual life and health insurance from GST with effect from 22 September 2025. Before this, health and term life premiums carried 18% GST, endowment attracted 4.5% (first year) / 2.25% (renewals) and annuities 1.8%. All of these are now 0% for individual policyholders.
Individual life & health — exempt
- Term, endowment, money-back & whole life
- ULIPs and individual annuity / pension plans
- Health, Mediclaim, family floater & senior-citizen cover
- Health riders attached to life policies
- No GST added to your premium
General & group — still taxable
- Motor, marine, fire & other general insurance
- Group / employer health & life policies
- Professional indemnity & commercial cover
- Business can claim ITC where not blocked
- SAC 9971 — general insurance service
Because individual life & health insurance is now an exempt supply, insurers can no longer claim ITC on their own inputs for these policies. Some of that cost may filter into base premiums — so the headline saving is not always the full 18%. The 0% still applies to what appears on your premium notice.
Not sure whether your policy is exempt or 18%?
Get My GST Rate →How Your Premium Changes — ₹30,000 Cover
Individual health 0% (now)
Same policy 18% (before 22 Sep 2025)
For an individual health or term life policy, the GST line is now nil — you pay only the base premium. For a motor or group policy, 18% still applies on the premium.
Paying 18% on a motor or group policy? Check whether your business can claim the ITC.
Talk to a GST Expert →Section 80D & 80C — Deducting the Premium
The GST exemption is separate from income-tax relief. Under the old regime, you can still claim the premium you actually pay: health under Section 80D and life under Section 80C. With GST now nil on individual policies, the deductible amount is simply the base premium.
| Deduction | Who | Limit |
|---|---|---|
| 80D — self / family (below 60) | Health premium | ₹25,000 (incl. ₹5,000 health check-up) |
| 80D — self / family (senior citizen) | Health premium | ₹50,000 |
| 80D — parents (senior citizen) | Health premium | Additional ₹50,000 |
| 80C — life insurance | Life premium | Part of overall ₹1.5 lakh |
Section 80D and 80C are available under the old regime only — the new tax regime does not allow these deductions.
With 0% GST, the premium you pay is fully the deductible amount — there is no longer a GST component to add back. If you switched to the new regime, remember these deductions are not available there, so weigh the premium GST saving against the regime you file under.
ITC on Insurance — When a Business Can Claim
Individuals never claim ITC — they are not GST-registered. For a GST-registered business, ITC depends on the type of cover and the blocked-credit rules under Section 17(5):
| Business pays GST on | ITC? | Reason |
|---|---|---|
| Marine / fire on business assets | Yes | Business use — not a blocked credit |
| Professional indemnity for the business | Yes | Business use — ITC eligible |
| Group health / life for employees | Mostly No | Blocked under 17(5)(b) unless obligatory by law |
| Motor insurance on a blocked vehicle | No | Follows the vehicle ITC block |
ITC on employee insurance is allowed only where providing it is obligatory under a law in force — otherwise it is blocked.
You benefit from the exemption if
- You hold an individual health, term or endowment policy
- You buy or renew a family floater or senior-citizen cover
- You have an individual annuity or pension plan
You still pay 18% if
- Your cover is a group / employer or corporate policy
- It is motor, marine, fire or other general insurance
- You buy professional indemnity or commercial cover
Frequently Asked Questions
Related TaxClue services
GST on Insurance — Get the Rate Right
Whether you are an insurer reporting exempt supplies, a business claiming ITC on general insurance, or unsure if your policy is exempt, TaxClue's CA-led team handles classification, ITC and return filing — 100% online, across India.