India exempts individual life and health insurance policies from GST
This page records one dated change. For the rules in India as they stand today, see the India guide →
- Jurisdiction
- India
- Tax
- GST
- Change type
- Rate change
- Status
- In force
- Impact
- Action required
- Announced
- 17 September 2025
- Effective
- 22 September 2025
- Instrument
- IN-NOTIFICATION-16-2025-Central-Tax-Rate
- Authority
- GST Council / CBIC (Ministry of Finance, Department of Revenue)
- Verified
- Fetched from official source · high confidence
Life and health insurers and reinsurers writing individual policies in India, and the individuals who buy them. Group policies are outside the exemption.
From 22 September 2025, all individual life insurance policies (term life, ULIP, endowment) and all individual health insurance policies (including family floater policies and policies for senior citizens), and reinsurance of these, move from 18% (with ITC) to exempt. The exemption covers individual policies only.
The 56th GST Council recommended, and CBIC notified (Notification No. 16/2025-Central Tax (Rate) dated 17 September 2025, effective 22 September 2025), a full GST exemption for all individual life insurance policies (term life, ULIP, endowment) and their reinsurance, and all individual health insurance policies (including family floater and senior citizen policies) and their reinsurance, reducing the rate from 18% to nil. Group insurance policies are excluded from the exemption.
What changed in detail
At its 56th meeting on 3 September 2025 the GST Council recommended two insurance exemptions:
- all individual life insurance policies, whether term life, ULIP or endowment, and their reinsurance; and
- all individual health insurance policies, including family floater policies and policies for senior citizens, and their reinsurance.
The Council’s stated aim was to make insurance affordable and to increase insurance coverage.
These premiums were previously taxed at 18%. The exemption was given effect by a Central Tax (Rate) notification dated 17 September 2025 and applies from 22 September 2025, the date the Council set for its rate changes on services. From that date the premiums carry no GST.
The exemption covers individual policies only. Group life and group health policies are outside it.
What it means
The exemption is still in force. Policyholders no longer pay 18% on top of the premium for individual cover. Insurers now make exempt supplies on those policies, so they can no longer claim input tax credit for the costs of writing them, such as commissions, marketing and technology. That lost credit may show up in premium pricing.
Insurers that sell both individual and group business have to split their input tax credit between taxable and exempt supplies. Employers buying group cover still pay GST on it.
The exemption was part of the same Council package as the two-slab rate rationalisation.
Proof
Exemption of GST on all individual life insurance policies whether term life, ULIP or endowment policies and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · PIB press release: Recommendations of the 56th Meeting of the GST Council, 3 September 2025 · gstcouncil.gov.in