1. What is the current GST rate on individual health insurance ?

As of 22 September 2025, the GST rate on individual health insurance is zero per cent, which implies that no tax is levied on the premium amount.

2. Does the 0% GST apply to family floater health insurance plans ?

Of course, family floater plans bought as individual health insurance policies are also listed under the 0% GST category and hence do not attract any tax.

3. Do health insurance plans for senior citizens also have 0% GST now ?

Yes, under the current law, all individual health insurance plans for senior citizens are exempt from GST (0%), thereby making these plans with higher premiums more economically accessible to older adults.

4. Are group health insurance policies also exempt from GST ?

Not really. Group health insurance plans, like company-provided or corporate plans, are still charged 18% GST and thus are not covered under the new exemption.

5. My policy renews after 22 September. Will I get the 0% GST benefit ?

Indeed. Any renewal that takes place on or after 22 September 2025 will be automatically entitled to the 0% GST concession for individual health insurance.

6. Does 0% GST apply for add-ons like critical illness or maternity cover ?

Certainly, if these riders form part of an individual health insurance policy, then they also receive 0% GST under the new regulation.

7. What happens to instalments paid before 22 September ?

Any premium installments paid before 22 September will continue to fall under the old 18% GST. Instalments falling after this date will be under 0% GST.

8. Why did the government remove the GST on health insurance ?

It was removed to facilitate affordable health insurance, to promote policy adoption, and to relieve the financial burden of middle-income families.

9. Can insurance companies increase base premiums even after the removal of the GST ?

Yes, the insurers can increase the base premiums later as they would no longer be able to avail the benefits of input tax credit. But customers would still be better off without 18% GST.

10. How much can I save with 0% GST on my health insurance premium ?

This completely depends on your base premium. The higher the premium, the more you save because you will not pay the earlier 18% GST on that portion.

GST on Health Insurance Premium 2026 - Impact of GST on Medical Insurance

Health Insurance

Term Insurance

Blogs

Claims

Tools

Partner with us

Health Insurance
- Explore Insurers
- Explore Insurance Plans
- Explore Insurance Types
Term Insurance
- Explore Insurers
Blogs
Claims
- Claim Stories
- Explore Insurers
Tools
- Explore Calculators

Partner with us

OneAssure

Blogs

Health Insurance Guides

Impact of GST on Health Insurance Premium

Mahak Chauhan

November 19, 2025

Need advice tailored to you?

Looking for the right plan? You don't have to guess. Let us compare the fine print for you and give you an unbiased recommendation.

Need advice tailored to you?

Looking for the right plan? You don't have to guess. Let us compare the fine print for you and give you an unbiased recommendation.

When you purchased or renewed a health insurance policy, the amount you paid has always been higher than the base premium shown by the insurance company. While earlier this was due to the addition of GST to the premium, for long periods, GST on health insurance was 18%, making the total premium costlier each year.Many wondered why health insurance premiums kept on increasing and why the final payment amount always appeared to be so high. Well, the biggest culprit used to be GST. But times have changed now.With effect from 22 September 2025, the Indian Government has reduced GST on individual health insurance to 0%. This is a major change and a big relief for policyholders.In this updated guide, you will understand everything about GST on health insurance after the new rule. The explanations are simple, clear, and in everyday English.

What is GST?

GST stands for Goods and Services Tax. GST is a single kind of tax on most of the goods and services throughout India. Before GST, there were a lot of different indirect taxes in India, like service tax, VAT, excise duty, and many others, which created chaos.All these taxes were simplified and combined into one, namely GST. As health insurance is considered a service, GST was applied earlier for it.

GST on Health Insurance Before 22 September 2025

Before the new rule kicked in, GST on health insurance was 18%. And that 18% was added on top of your base premium. Take this example:

If your premium was ₹10,000, you paid ₹1,800 as GST.
Your final payable amount became ₹ 11,800.
It increased the total amount that you paid each year.

GST on Health Insurance After 22 September 2025

From 22 September 2025, GST on individual health insurance premiums is 0%. This means:

You pay only the base premium.
No tax is charged in addition.
The overall cost of your policy becomes lower.

However, the 0% GST only applies to individual health insurance, including:

Individual plans
Family floater plans
Senior citizen plans
Individual policies with add-ons

Group health insurance (like policies issued by the employer) still has 18% GST.
Also Read: Lock in 0% GST on Term Insurance

Why did the government remove GST on individual health insurance?

Behind this change lie a few simple reasons:

Health insurance has become a basic need in India.
Medical costs are growing rapidly, and people have to be protected financially.
GST clearly made the premiums costlier, especially for middle-class families.
The government wants to make health insurance more affordable and easily available.

This move will help to motivate people to buy more health insurance for themselves and their families.

How 0% GST Impacts Your Health Insurance Premium

While GST was adding 18% to your final premium amount, with 0% GST now, the same policy gets cheaper.Let us look at a few simple examples.Example 1: Individual Health Insurance (Young Adult)

Base Premium: ₹6,000
GST Earlier (18%): ₹1,080
Total Previously: ₹7,080
Now (0% GST): ₹6,000

Example 2: Family Floater Plan

Base premium: ₹20,000
GST Excluded: ₹3,600
Total Earlier: ₹23,600
Now (0% GST): ₹20,000

Example 3: Senior Citizen Policy

Base Premium: ₹40,000
GST Ex-Mumbai: ₹7,200
Total Earlier: ₹47,200
Now (0% GST): ₹40,000

The higher your base premium was, the more you save now.

Does the new 0% GST apply every year?

Yes. All premiums paid for individual health insurance will attract 0% GST with effect from 22 September 2025, whether it is:

A new policy purchase
A yearly renewal
A monthly or quarterly instalment (paid after 22 September)

If your instalment was paid before the date, the old 18% GST would apply only to that part.
Also Read: GST Rate on Health Insurance 2026

GST on Riders and Add-ons Post Amendment

Earlier, GST also applied to add-ons like:

Now, if these riders form part of an individual health policy, they also fall under 0% GST.But if they are added under a group health plan, then GST remains 18%.

Is GST the Same for All Health Insurance Plans Now?

No. After the new rule, the system is as follows:

Individual health insurance: Nil GST
Family floater (individual policy): 0% GST
Senior citizen: Individual plan: 0% GST
Group health insurance : 18% GST
Corporate or employer-provided plan: 18% GST

So, the GST rates vary based on the type of policy.

Will the GST change again in the future?

As of now, the GST for health insurance is officially reduced to 0%. There is no confirmed news of any increase or changes in the near future.However, discussions in the GST Council may happen again depending on economic conditions, insurance company feedback, or government policies.

Can You Save More Money Because of 0% GST?

Yes, you save a good amount every year, especially if your premium is high. But there are more ways to reduce your overall insurance cost.1. Buy long-term policiesSome insurers offer discounts for 2–3 year plans.2. Compare plansPremiums vary among companies. The lower the base premium, the lower your total cost.3. Utilize tax benefits under Section 80DYou can claim tax deductions on your premium amount:

₹25,000 for self, spouse, and children
₹50,000 for senior citizen parents
Higher limits available if you insure both sets of parents

The entire premium paid by you without GST is allowed as a deduction.4. Buy insurance earlyInsurance is even more affordable, as younger buyers get low premiums.5. Choose only needed add-onsUnnecessary riders increase your base premium.

Key Takeaways After GST Became 0%

GST on individual health insurance is 0% now.
GST on group health insurance stays at 18% only.
Your overall premium on individual policies becomes lower.
It therefore covers new policies and renewals that take place after 22 September 2025.
Add-ons, even in individual policies, follow 0% GST.
Health insurance becomes more affordable for families and senior citizens.