GST on Health Insurance

GST, or Goods & Services Tax, will not be charged by the Government of India on health insurance premiums from September 22, 2025. In a landmark move, Finance Minister Nirmala Sitharaman have announced GST exemption on all individual medical insurance plans after the 56th GST Council meeting. Read on to know everything about GST on health insurance and its impact on premiums.

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      What is GST on Health Insurance?

      There will be no GST on health insurance premiums in India with effect from September 22, 2025. After the 56th GST Council meeting, the Indian government has removed GST from buying and renewing a health insurance policy for individuals, families, and senior citizens, as well as on critical illness plans. This removes the current GST of 18% charged on medical insurance premiums by insurance companies.

      At present, only people buying the Universal Health Insurance Scheme (UHIS) and Niramaya Health Insurance Scheme are exempted from paying GST on medical insurance. However, with the new GST rates in effect from September 22, 2025, anyone buying individual health plans, including family health insurance and senior citizen health insurance plans, is exempted from paying GST on premiums in India.

      GST Impact on Health Insurance Premium

      How to Calculate Health Insurance Premiums After GST Exemption?

      After the GST exemption on health insurance, the total premium payable by the policyholder will not include the GST amount. Let's understand how health insurance premiums will be calculated after the GST exemption with the following example:

      Suppose Raman has purchased a mediclaim policy of ₹10 lakh for an annual base premium of ₹15,000. Currently, an 18% GST is charged by his insurance company on top of this premium amount, i.e. 18% of ₹15,000 = ₹2,700. This would bring the total premium payable after adding GST to ₹17,700 (₹15,000 + ₹2,700).

      But from September 22, 2025, Raman will only pay a health insurance premium of ₹15,000 without adding the GST amount. Hence, he will end up saving ₹2,700 on premiums.

      Health Insurance Premiums Before vs After GST Exemption

      Take a look at the table below to compare health insurance premiums before and after the GST exemption:

      Categories Health Insurance Premium with GST Health Insurance Premium After GST Exemption
      Sum Insured ₹10 lakh ₹10 lakh
      Base Premium Without GST (A) ₹15,000 ₹15,000
      GST on Premium (B) 18% of ₹15,000 = ₹2,700 ₹0
      Premium Payable (A + B) ₹17,700 ₹15,000

      Thus, health insurance plans will become more affordable after the removal of GST.

      Impact of No GST on Health Insurance

      Before the GST exemption comes into effect, a GST of 18% is levied on all health insurance plans. This led to an increase in medical insurance premiums, making many customers hesitant to buy a policy. As a result, GST was responsible for low penetration of health insurance in India.

      However, with the exemption of GST on buying or renewing health insurance, all mediclaim policies will become more affordable and thus more accessible to the masses. This will help in increasing its penetration in India.

      Advantages of No GST on Health Insurance

      Check out some of the advantages of GST exemption on health insurance:

      • Mediclaim policies will become more affordable, as policyholders will only have to pay the base premium quoted by the insurer.
      • It will help increase health insurance penetration in India and achieve the vision of ‘Insurance for All by 2047’.
      • It provides financial relief to senior citizens who heavily rely on health insurance to pay their medical bills.
      • It can encourage people to opt for medical coverage with a higher sum insured amount.

      GST on Health Insurance: FAQs

      • Q1. What is the GST for health insurance?

        Ans: At present, the GST for health insurance is 18%. However, starting from September 22, 2025, no GST will be charged on all health insurance plans in India, including family floater plans and senior citizen health insurance plans.
      • Q2. Is there GST on health insurance for ₹5 lakh?

        Ans: Yes. Currently, a GST of 18% applies to all health insurance plans of ₹5 lakh. However, no GST will be applied on buying or renewing medical insurance from September 22, 2025.
      • Q3. What is the GST rate for health insurance in 2025?

        Ans: The GST rate for health insurance until September 21, 2025 is 18%. However, starting from September 22, 2025, no GST will be charged on health insurance premiums.
      • Q4. Is health insurance GST-free now?

        Ans: Yes. Health insurance is GST-free from September 22, 2025.
      • Q5. What is GST on health insurance for senior citizens?

        Ans: Currently, the GST on health insurance for senior citizens is 18%. However, starting from September 22, 2025, no GST will be charged on buying a senior citizen health insurance policy.
      • Q6. Is there GST on mediclaim?

        Ans: Yes. At present, a GST of 18% is applicable on buying or renewing a health insurance policy. However, starting from September 22, 2025, no GST will be charged on all individual health insurance plans, including family floater and senior citizen plans.
      • Q7. How much GST is charged on health insurance?

        Ans: A GST of 18% is currently charged on health insurance premiums. However, it will be reduced to 0% from September 22, 2025.
      • Q8. Is health insurance exempt under GST?

        Ans: Yes. All individual health insurance plans are exempt from GST from September 22, 2025.
      • Q9. Will GST be removed from insurance?

        Ans: Yes. GST has been removed from health insurance premiums with effect from September 22, 2025.
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      Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

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      *All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

      **All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.

      *₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

      *₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

      *₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

      *₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

      *No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

      *The values taken for effective cost calculation are indicative values and may change as per the selected plan.

      *Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

      *Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

      *The scope of coverage may vary from plan to plan.

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