Do I have to pay GST on senior citizen health insurance?

You no longer have to pay GST on health insurance for senior citizens , as the rate was slashed to 0% in September 2025. This change provides significant relief for older adults, who often face higher premiums due to age-related risks. For instance, a ₹15 lakh policy for a 60-year-old in Delhi that previously cost ₹58,018 now only costs ₹49,168 after the tax removal. This reduction of nearly ₹9,000 makes comprehensive healthcare much more viable for older policyholders. It specifically targets those paying high retail premiums for personal or family floater health insurance .

Can I get a GST refund for policies bought before September 2025?

The 0% GST benefit applies only to premium payments made on or after September 22, 2025. If you purchased or renewed your policy before this official cut-off date, you would have already paid the then-applicable 18% tax, which is not refundable. The GST Council has clarified that the date of premium payment is the determining factor, regardless of when the policy coverage period actually begins. Consequently, policyholders with renewals falling after the effective date are the primary beneficiaries of the new zero-tax regulation for their next payment cycle.

How can I claim section 80D tax benefits with 0% GST?

Even with the removal of GST, you can still claim tax deductions on the full premium paid under Section 80D (old regime) of the Income Tax Act. The deduction limit remains at ₹25,000 for individuals and families, and ₹50,000 for senior citizens. Since the GST component was previously part of the total deductible amount, your actual deduction might be slightly lower now because your total out-of-pocket spending has decreased. However, the core benefit of reducing your taxable income remains unchanged.

Will health insurance base premiums be revised after the GST removal?

There is a strong possibility that base premiums might see a slight revision due to the loss of the input tax credit (ITC) for insurance companies. When a service like health insurance becomes GST-exempt at 0%, the insurer can no longer claim tax credits on its own operational business expenses. To manage these increased costs, some major insurers have already begun implementing premium revisions. While the removal of the 18% tax still results in a net saving for you, these gradual adjustments in base rates are expected as the industry aligns with the new GST 2.0 regulatory environment.

Is GST removed on top-up and super top-up health plans?

Yes, the 0% GST rate officially applies to all retail top-up and super top-up health insurance plans effective from September 2025. These plans are treated as individual health insurance products under the new GST 2.0 framework, allowing you to increase your coverage without the 18% tax burden. This change encourages policyholders to secure higher protection against medical inflation without worrying about the high tax markup that previously existed.

Does the GST exemption apply to health insurance renewals?

The GST exemption applies equally to both new purchases and policy renewals , provided the payment is made on or after September 22, 2025. If your policy is up for renewal in 2026, your insurer must automatically calculate your premium at the 0% tax rate. You should verify your renewal notice to ensure that the previously standard 18% GST has been removed from the total amount due. This automatic transition ensures that existing policyholders benefit from the new tax regime without needing to submit any additional applications or paperwork to the insurance company or tax authorities.

How does the loss of input tax credit affect health insurance prices?

While the GST on premiums is now 0%, insurance companies can no longer claim input tax credit (ITC) on their business expenses, like office rent or software services. To offset this loss, some major insurers are revising their base premiums in 2026. Despite these minor base rate revisions, you still see a significant net saving on your total bill compared to the old 18% tax rate. It remains a massive financial win for consumers, as the overall cost of individual health insurance has dropped substantially.

GST on Health Insurance: Rates & Premium Impact [2026]

Q: What is the current GST rate on health insurance in India?

As of late 2025, the GST rate on individual health insurance premiums is 0%. This historic exemption was announced during the 56th GST Council meeting to make healthcare more affordable for the general public. However, it is important to note that this zero-tax benefit applies only to retail policies such as family floater and senior citizen plans. Conversely, group health insurance provided by employers still carries a standard GST rate of 18%. This distinction ensures that individual taxpayers save significantly while corporate insurance costs remain subject to the regular service tax bracket.

Overview

Goods and Services Tax (GST) on health insurance depends on the policy type. The revised rates came into effect on September 22, 2025.

Individual and Family Floater Policies: GST exemption applies to (retail) individual, family floater, senior citizen, and eligible top-up policies. You only pay the base premium.
Group and Corporate Policies: 18% GST continues to apply to employer-sponsored and other group health insurance policies.

Key Rules and Timing

Payment Date: Premiums paid on or after September 22, 2025, qualify for the exemption, even if the renewal was due earlier.
No Refunds: GST paid under the previous rules is not automatically refunded simply because the exemption took effect.
Claims: GST is not charged on cashless or reimbursement claim settlements.
Tax Deductions: Section 80D (now Section 126) deductions remain available under the old tax regime, based on the actual eligible premium paid.

Until last year, a health insurance policy with a base premium of ₹20,000 would have cost you ₹23,600 after adding 18% GST. But things changed on September 22, 2025, when the government exempted eligible individual and family floater policies from GST. The catch? Group health insurance policies, including those provided by employers, still attract 18% GST.

So, how much can you actually save, and will your renewal premium become cheaper?

In this guide, we break down GST on health insurance in India, which policies qualify for the exemption, how it affects your premiums and tax deductions, and what the proposed changes mean for employers.

What Is the Current GST Rate on Health Insurance in India?

As of September 22, 2025, GST on eligible individual health insurance policies has been reduced from 18% to 0%. However, group health insurance policies, including employer-sponsored plans, continue to attract 18% GST.

This means individuals can now purchase or renew eligible health insurance policies without paying additional GST on their premiums.

How Does GST Exemption Affect Health Insurance Premiums?

Removing the 18% GST on health insurance premiums means policyholders can save money directly. People paying higher base premiums, such as senior citizens and larger families, can save more if their base premiums remain unchanged.

Profiles for a ₹15 Lakh Policy	Premium (Including 18% GST)	After Exemption (No GST)	Premiums Saved
Individual Plan: Age 25	₹15,843	₹13,426	₹2,417
Family Floater: 2 Adults (Ages 31 and 32)	₹24,871	₹21,077	₹3,794
Family Floater: 2 Adults, 1 Child (Ages 35, 34, 5)	₹30,627	₹25,955	₹4,672
Family Floater: 2 Adults (Ages 62, 63)	₹1,02,737	₹87,065	₹15,672

Note: The premiums are calculated for the HDFC ERGO Optima Secure plan with the recommended add-on for individuals residing in Delhi (pincode: 110010). These numbers are illustrative and may vary based on age, location, medical conditions, and chosen add-ons.

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Which Health Insurance Policies Are Exempt from GST?

As of September 22, 2025, the following types of eligible individual health insurance policies are exempt from GST:

Individual health insurance policies
Family floater plans
Senior citizen health insurance policies
Critical illness covers (individual)
Retail top-up and super top-up health plans (individual)
Reinsurance for the above-mentioned covers.

Note: The exemption applies based on the premium payment date, not the policy start date. If your renewal is after September 22, 2025, and you pay on or after that date, you automatically receive the exemption benefit.

Does Group Health Insurance Still Attract GST?

Yes, group health insurance policies, including employer-provided corporate plans and bank-offered group policies, continue to attract 18% GST. However, a recent GST Council recommendation could eventually make this tax recoverable for eligible employers.

Recent Update: Input Tax Credit (ITC) for Employers

Section 17(5) of the CGST Act generally blocks ITC on employee health and life insurance. Exceptions apply, including when employers must provide the coverage by law.

However, at the 57th GST Council meeting on October 8, 2026, the Council recommended amending Section 17(5) to remove restrictions on ITC for health and life insurance, among other expenses.

What Could This Mean for Employers and Employees?

The recommendation does not change the law on its own. Expanded ITC eligibility will depend on the amendment being legally implemented and employers meeting the applicable conditions.

If implemented, eligible GST-registered businesses could offset the GST paid on employee group health insurance against their GST liabilities. This could make employee health insurance more affordable for businesses, especially smaller employers.

However, savings would not automatically translate into lower employee contributions or higher coverage limits. Group health insurance premiums would still attract 18% GST.

Note: If you rely only on your employer's group health insurance, consider buying an individual policy, as employer coverage usually ends when you leave your job. To explore your options, read our guide on the best health insurance plans in India.

You can also ask your insurer about migrating to an individual plan before your group cover ends. Eligible waiting periods and other credits may carry over, subject to policy terms and underwriting.

How Does India's GST on Health Insurance Compare Globally?

India introduced the GST exemption for eligible individual health insurance policies as part of its broader push toward Insurance for All by 2047. The infographic below compares taxes on private health insurance across G20 countries, including India.

Private health insurance tax rates vary across G20 countries; India exempts retail policies from GST while group policies attract 18% GST.

How Does GST Exemption Affect Section 80D Tax Benefits?

Removing 18% GST on individual health insurance premiums does not change the deduction limits under Section 80D (now Section 126) of the Income Tax Act (old tax regime).

Individuals and Families: Up to ₹25,000 per financial year, increasing to ₹50,000 if the insured person is a senior citizen.
Parents: An additional deduction of up to ₹25,000, and up to ₹50,000 if either parent is a senior citizen.

However, Section 80D (now Section 126) deductions depend on the premium you actually pay. Your deduction could decrease if your eligible premium falls below the applicable deduction limit. If it remains above the limit, your deduction may stay the same. The deduction limits remain unchanged.

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Conclusion

The GST exemption is good news if you're buying or renewing an eligible individual health insurance policy. However, removing GST doesn't necessarily mean your renewal premium will fall by the same amount. Insurers can still revise their base premiums, although in Ditto's experience, the health insurance plans we recommend haven't seen any major base premium revisions since the exemption took effect. Employer-provided group health insurance still attracts 18% GST.

So, before renewing your policy, check whether the GST exemption has been applied and compare your new base premium with last year's. If you're considering using the savings to increase your sum insured or add useful benefits, that's worth exploring too.

Frequently Asked Questions

Do I pay GST on a family floater health plan after 22 September 2025?

No, individual family floater health insurance policies are exempt from GST starting September 22, 2025. Earlier, these policies attracted 18% GST on premiums. Now, you only pay the base insurer-quoted premium for new purchases and renewals. The exemption applies to eligible premium payments made on or after September 22, 2025, regardless of when the policy was originally purchased.

Does GST still apply to senior citizen health insurance premiums?

No, senior citizen health insurance policies purchased individually are exempt from GST effective September 22, 2025. Previously, these policies attracted 18% GST, increasing the overall cost of coverage. Senior citizens often pay higher premiums, so the exemption can mean greater savings. Eligible individual senior citizen health insurance policy renewals have no GST. However, insurers may still revise base premiums over time.

Is GST charged on the No-Claim Bonus (NCB) in a health insurance policy?

No, GST is not charged separately on an NCB. In health insurance, an NCB generally increases your sum insured without increasing your base premium, although some plans also offer premium discounts instead. Since eligible individual health insurance premiums are now exempt from GST, you do not pay GST on the premium, regardless of the NCB benefits available under your policy.

Can an employer claim input tax credit on group health insurance for employees?

Under existing GST rules, employers can claim ITC on GST on corporate health insurance in certain situations, such as when providing the cover is legally mandatory, or another statutory exception applies. On October 8, 2026, the 57th GST Council recommended removing broader restrictions under Section 17(5) of the CGST Act. However, this recommendation does not make ITC available to all employers. Businesses must check whether the amendment has been enacted, its effective date, and their eligibility before claiming ITC.

Is GST charged on individual critical illness insurance plans?

No, eligible standalone critical illness insurance policies purchased by individuals are exempt from GST effective September 22, 2025. These policies generally pay a fixed lump sum if the insured person is diagnosed with a covered critical illness, subject to policy terms. However, critical illness coverage purchased under a group policy may attract 18% GST, depending on the policy structure.

Do monthly, quarterly, or half-yearly installments qualify for zero GST?

Yes, monthly, quarterly, and half-yearly installments for eligible individual health insurance policies qualify for 0% GST if the insurer receives the payment on or after September 22, 2025. Installments paid before this date generally attracted 18% GST. The exemption depends on when you paid each installment, not when you originally purchased the policy. Check your premium receipts to confirm the GST charged.

Can an insurer increase my base premium even though GST is removed?

Yes, insurers can still increase base health insurance premiums even after the removal of 18% GST. The exemption removes only the tax component and doesn't prevent insurers from revising their prices. Factors such as increasing age, location changes, coverage changes, medical inflation, and insurer-wide premium revisions can affect your renewal amount. Compare your previous and current base premiums to understand whether you're actually saving money.

Last updated on: 24 Oct, 2026

GST on Health Insurance in India