Archive · 5 Sep 2025
GST Council Exempts Health, Life Insurance; Premiums Expected to Drop
The Indian government is removing the tax (GST) on health and life insurance, starting September 22, 2025.
This should make insurance cheaper, helping more people afford it.
Insurance companies are figuring out exactly how much premiums will go down, as it depends on tax credits.
The government expects to lose money, but hopes that people will be able to have more insurance, especially when health care is getting more expensive.
The states want to make sure companies pass the savings on to consumers.
GST Council voted to exempt individual health and life insurance from GST.
Exemption expected to lower insurance premiums for consumers.
The policy change is set to be effective from September 22, 2025.
Government anticipates a revenue loss of approximately ₹9,900 crore.
States, barring Punjab and Tamil Nadu, supported the move.
- Who
- GST Council, insurance companies, consumers
- What
- Exemption of GST on individual health and life insurance policies
- When
- Effective September 22, 2025
- Where
- India
- Why
- To increase affordability and accessibility of insurance
- Key Change
- GST exemption on individual health and life insurance policies, including reinsurance
- Effective Date
- September 22, 2025
- Revenue Impact
- Estimated ₹9,900 crore loss
- Beneficiary
- Consumers, with potential for increased affordability
- Industry Reaction
- Cautious, awaiting clarity on input tax credit impact
- State Opposition
- Punjab and Tamil Nadu dissented during the decision
Sources
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