Archive · 13 Sep 2025
GST Exemption on Insurance: Refund Rules Explained
Imagine the government is removing a tax on your insurance.
If you paid for your insurance all at once before September 22, 2025, you won't get any of that tax money back.
But, if you pay in installments, any payments you make after September 22, 2025, will be tax-free.
If your payment was due before this date, even if you pay during a grace period, you still pay the tax.
However, if you cancel a new insurance policy within a certain time, you can get a refund of the tax paid.
GST on life and health insurance premiums is being removed, effective September 22, 2025.
No GST refunds are available for premiums already paid before the effective date.
Installment payments due on or after September 22, 2025, will be GST-free.
Payments made during a grace period, if the original due date was before September 22, still incur GST.
Policy cancellations during the free-look period may result in a GST refund.
- Who
- Policyholders and insurers
- What
- Changes to GST on life and health insurance premiums
- When
- GST exemption effective September 22, 2025
- Where
- India
- Why
- To reduce the cost of insurance.
- Key Change
- 18% GST scrapped on life/health insurance premiums from Sept 22, 2025
- Lump-Sum Premiums
- No GST refund for premiums paid before Sept 22
- Installment Payments
- GST-free for payments due on/after Sept 22
- Grace Period
- GST applies if the due date was before Sept 22
- Free-Look Cancellations
- GST refund possible (minus deductions)
- New Policies
- Consider starting policies after Sept 22 to avoid GST
