Save tax up to ₹75,000~ u/s 80D
Save tax up to ₹75,000~ u/s 80D
Did you know all insurance plans are now exempt from the Goods and Services Tax (GST)? As per the recent GST amendment announcement, starting from September 22, 2025, no GST will be charged on all individual health insurance plans. Read on to learn more.
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GST is a single indirect tax applied at the point of consumption of various goods, such as household items, food, textiles, and electronic products, as well as services like transportation, real estate, and insurance. The Goods and Services Tax (GST) was introduced in 2017 to remove the cascading effects of multiple taxes. GST is applied on various goods and services under two slabs, 5% and 18%.
There are four types of GST:
GST is exempt from the health insurance retail policy. Health insurance is classified as a service industry, and GST is a tax on services. The Health Insurance HSN code is 997133, and GST is exempt from it.
At the 56th GST Council Meeting, all health insurance retail policies were made free from GST. From the beginning, Government-run health insurance schemes designed for the economically weaker sections of society attract zero GST.
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All retail insurance policies, including the best health insurance, fall under the Goods and Services Tax (GST). Healthcare services have a lower or zero taxation, but as per the government, insurance is a financial service rather than a healthcare service. As per the recent announcement by the GST Council, health insurance is exempt from GST, which meansthe insured has to pay no GST on medical insurance premium amount.
After the implementation of GST exemption on medical insurance premiums from 22nd September 2025 onwards, , insurance costs for buyers have been eased with removal of the tax. You can now save the GST amount, which earlier you would have to pay on your insurance premium.
Especially, those who have purchased health insurance policies earlier and for a longer period will greatly benefit by the GST reform. When they renew their policies, their premium will be exempt from GST tax.
The premium you pay towards your health plan offers comprehensive coverage for various medical expenses, including hospitalisation. Such plans also cover the costs incurred during the policy period for pre- and post-hospitalisation, daycare treatments, diagnostic tests, OPD, and maternity care.
| Persons Covered | Exemption Limit | Total |
|---|---|---|
| Self and family | Rs 25,000 | Rs 25,000 |
| Self and family + parents | Rs 25,000 + Rs 25,000 | Rs 50,000 |
| Self and family + senior citizen parents | Rs 25,000 + Rs 50,000 | Rs 75,000 |
| Self (senior citizen) and family + senior citizen parents | Rs 50,000 + Rs 50,000 | Rs 1,00,000 |
According to Section 80D of the Income Tax Act, 1961, deductions can be claimed on medical insurance premiums up to Rs 1 lakh, if you opted for the old tax regime. The deduction amount depends on your age and the health insurance premium paid. Taxpayers can also claim deductions for GST on insurance premiums. Senior citizens can claim a deduction of up to Rs 50,000, while individuals below 60 can claim a deduction of up to Rs 25,000.
The deductions for GST for health insurance under Section 80D of the Income Tax Act may vary depending on the policy details. The table below provides a clearer understanding:
GST on mediclaim policy considerably impacts different elements of insurance in India. Here are the types of GST in health insurance:
The GST on health insurance products applies to the entire premium amount.
Consider a health insurance policy with a yearly premium of ₹10,000.
| Details | Amount (₹) |
|---|---|
| Yearly Premium | 10,000 |
| GST (18%) | 1,800 |
| Total premium including GST | 11,800 |
| Savings (due to GST Exemption) | 1,800 |
From the above chart, we understand that:
Before the GST exemption, an 18% GST would have been applied, adding ₹1,800 (18% of ₹10,000) to the premium, bringing the total cost to ₹11,800.
Now, with the exemption applicable, the policyholder only pays the yearly premium of ₹10,000, saving ₹1,800.
*The numbers are for illustrative purposes only. The actual amount may vary.
The exemption of GST on health insurance is a significant step towards making health coverage more accessible and affordable. This move will benefit the policyholders in the following ways:
Overall, the decision to exempt GST on health insurance will increase the general public's inclination towards health coverage by reducing their costs and boosting their savings.
Health Insurance is a shield that protects you and your loved ones in medical emergencies.
A right health insurance plan ensures that a financial crisis is not an issue during a medical emergency.
With the skyrocketing cost of healthcare in the country, opting for a good health Insurance Plan is a smart decision for the safety of the individual and family.
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After implementing GST, new policy buyers and those renewing their policies will have to pay only the base premium. However, those who purchased policies earlier and for a longer period would not be impacted by GST. Yet, when they renew their plans, their premium will be free from GST.
There are some significant advantages of GST exemption on health insurance policies in the form of reduced premium prices for health insurance buyers. Here are the positive impact to look forward to in this regard:
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Health insurance is crucial for a family's financial protection today. It is essential to realise that by paying the premium, with additional GST charges, you are getting extensive health cover that covers the medical expenditures you are likely to incur.
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GST is a single indirect tax levied on different household items, food, textile, home appliances, services, transportation, etc. It has two slabs: 5% and 18%. At present, GST is exempt on health insurance.
There is no GST on a family health insurance in India. . This implies that when you make a premium payment, GST component won’t apply to it.
It has its pros and cons for goods and services. On one side, it removes the interstate movement of goods increase the supply and decreases the prices. On the other hand, it also increases the costs of the goods and services buyers ultimately have to bear.
Yes, GST on health insurance is indirectly tax-deductible for individuals under Section 80D under the old tax regime.
The health insurance premium (including GST) paid is eligible for tax deductions under Section 80D of the Income Tax Act, 1961, if you opt the old tax regime.
No GST is payable on all medical insurance policies effective from 22 September 2025.
No, the GST already paid by existing policyholders in their premiums is not refundable.
Yes, you can view the GST component you are paying for health insurance premium.
Yes, the health insurance GST rate is applicable in Jammu and Kashmir.
Health insurance premiums are GST-exempt under the HSN code 997133.
GST is exempted on health insurance premiums.
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