Premium Factors, Cover Features and 2026 Rules
GST on health insurance after 22 September 2025: what is exempt and what still pays 18%
Individual and family floater health policies are GST-exempt from 22 September 2025. What the exemption covers, what still carries 18% GST, and how to check a renewal.
From 22 September 2025, premiums for individual health insurance policies in India are exempt from GST. The exemption, recommended at the 56th meeting of the GST Council in September 2025, covers policies bought by individuals for themselves and their families, including family floater and senior citizen policies, and the reinsurance of such policies. Before that date these premiums carried 18% GST. Group health insurance bought by an employer or another group holder is not covered by the exemption and still carries 18%. If your 2026 renewal notice for a personal policy shows a GST line, ask the insurer to explain it in writing.
This guide belongs to the overview of how health insurance works in India.
What is exempt and what is not
| Policy type | GST position from 22 Sep 2025 | Notes |
|---|---|---|
| Individual health policy | Exempt | Bought by an individual for themselves |
| Family floater | Exempt | Individual policy covering family members |
| Senior citizen health policy | Exempt | Including policies bought by children for parents |
| Super top-up or top-up bought individually | Treated by insurers as an individual health policy | Confirm on your premium receipt |
| Individual critical illness cover | Generally treated as individual health insurance | Check how the insurer classifies the product on the invoice |
| Group health policy (employer-employee) | 18% GST continues | Employer usually bears it; some employers recover part of the premium for dependants or parents |
| Group policies for credit-linked or other groups | 18% GST continues | Such as cover bundled with a loan |
The notification issued after the Council meeting, and any later clarification, decide edge cases. If a product sits between categories, the insurer's tax invoice should show how it has been treated.
Worked example: what changed on a renewal
Illustrative. A family floater had a base premium of ₹30,000.
| Before 22 Sep 2025 | From 22 Sep 2025 | |
|---|---|---|
| Base premium | ₹30,000 | ₹30,000 |
| GST at 18% | ₹5,400 | ₹0 |
| Total paid | ₹35,400 | ₹30,000 |
A saving of ₹5,400, or about 15.3% of the old total (5,400 ÷ 35,400). In practice the saving at renewal may not be exactly this. Insurers can no longer claim input tax credit on GST they pay on their own costs (commissions, rent, services) for exempt supplies, and some insurers revised base premiums after the change. The base premium may also rise at renewal for your age band. Compare base premium to base premium, not old total to new total, to see what really happened.
Timing: which premium falls on which side of the date
For renewals around the changeover, the GST treatment depended on the time of supply rules in the CGST Act, which look at the dates of invoice, payment and the start of the supply. Insurers applied these rules to premiums received around 22 September 2025. For anything paid in 2026 on an individual policy, the exemption applies. If you paid a multi-year premium before 22 September 2025, GST was charged on the whole amount at that time and is generally not refunded; check with your insurer if your policy started after that date.
Effects on tax deductions
The health insurance deduction (Section 80D of the 1961 Act, continued under the Income-tax Act, 2025) is based on the premium you actually pay. Under the old regime, before the exemption the GST portion counted towards the limit. Now the deduction is simply the premium paid. A family that was at the ₹25,000 limit including GST may now be below it. See the 80D worked example.
What it means for employer cover
Group health premiums still carry 18%. If your employer asks you to pay for adding parents or for a top-up on the group policy, that contribution may include GST. Compare it with buying an individual policy for your parents, which is GST-exempt and stays with you if you change jobs. See group health insurance vs a personal policy.
Illustrative. Adding parents to a group policy for ₹40,000 + 18% GST = ₹47,200, versus an individual senior citizen floater at ₹45,000 with no GST. The individual policy is cheaper here and continues after you leave the job; the group option may still win if it has no waiting periods and your parents have conditions that would face a wait under a new policy. Compare features, not just the price.
Checklist for your next renewal
- Check that the invoice or premium receipt shows no GST on an individual or floater policy.
- Compare the base premium with last year's base premium.
- If the base premium jumped sharply, ask for the reason: age band change, product revision, claim-free bonus lapsed, or a loading.
- For seniors, check the premium change against IRDAI's position on increases for senior citizens on the IRDAI website.
- Recalculate your old-regime deduction with the tax saving calculator.
For how premiums are built, see individual vs family floater.
Frequently asked questions
Will I get a refund of GST paid before 22 September 2025?
Generally no. The exemption is not retrospective. Premiums that were taxed correctly at the time stay taxed.
Is life insurance also exempt?
Individual life insurance policies were exempted at the same time. That is outside the scope of this site; check the GST Council's notification.
My renewal shows "taxes: ₹0". Is the policy still valid for 80D?
Yes. The deduction depends on the premium paid by a permitted mode and the people insured, not on GST.
Sources and where to check
- GST Council — recommendations of the 56th meeting and related notifications
- Central Board of Indirect Taxes and Customs — notifications and time-of-supply rules
- IRDAI — circulars on premium changes
- Income Tax Department — health insurance deduction
