Quick answer: individual and family health insurance is exempt from GST with effect from 22 September 2025 (Notification No. 16/2025-Central Tax (Rate) — health insurance business where the insured is not a group). The rate was 18% before that date. Group health insurance remains taxable.
Health insurance is a vital aspect of financial planning in India, providing individuals and families with financial protection against medical emergencies. With the increasing cost of healthcare in the country, having a comprehensive health insurance policy is essential to avoid financial distress. In this article, we will delve into the world of health insurance in India, exploring its various aspects, including the GST rate, HSN code, and compliance tips.
Individual and family health insurance is exempt from GST with effect from 22 September 2025 — no GST is charged on those premiums. Group health insurance remains taxable at the applicable rate. Before 22 September 2025 the standard rate was 18%. The exemption applies to individual policies and family floater cover — the insured is an individual, or an individual and their family. Group health insurance remains taxable.
| HSN Code | GST Rate | Effective Date | Brief Description of Services |
|---|---|---|---|
| 9985 | Exempt (individual/family); taxable for group | 22 September 2025 (18% before) | Health insurance services, including individual, family floater, and group health insurance policies |
The GST rate for health insurance in India is 18%, which is applicable to all types of health insurance policies. However, there are some special conditions and exemptions that apply to certain types of health insurance policies. The exemption turns on who is insured, not on a disability-specific rate: where the insured is an individual (or an individual and family), the policy is exempt; where the insured is a group, the cover remains taxable.
| Type of Health Insurance Policy | GST Rate | Special Conditions or Exemptions |
|---|---|---|
| Individual Health Insurance Policy | 18% | None |
| Family Floater Health Insurance Policy | 18% | None |
| Group Health Insurance Policy | 18% | None |
| Health Insurance Policy for Individuals with Disabilities | 12% | Applicable to individuals with disabilities, as defined under the Rights of Persons with Disabilities Act, 2016 |
Prior to the introduction of the GST, the tax rate for health insurance in India was 15%, which included a service tax of 14.5% and a Swachh Bharat Cess of 0.5%. Historically, the introduction of GST raised the rate on health insurance to 18%, which increased the cost of cover for individuals and families in India.
From 22 September 2025 individual and family health insurance is exempt from GST, so no GST is charged on those premiums. The analysis below describes the position up to 21 September 2025.
Impact of GST on Health Insurance PremiumsThe increase in the GST rate from 15% to 18% has resulted in a significant increase in health insurance premiums in India. For example, if the annual premium for a health insurance policy was ₹10,000 prior to the introduction of the GST, the premium would increase to ₹11,800 after the introduction of the GST, assuming a GST rate of 18%.
Calculator:
function calculateGST() { var premium = document.getElementById("premium").value; var gstRate = 0.18; var gstAmount = premium * gstRate; var totalPremium = premium + gstAmount; document.getElementById("result").innerHTML = "The total premium with GST is: ₹" + totalPremium.toFixed(2); }Input tax credit (ITC) is a mechanism that allows businesses to claim a credit for the GST paid on inputs, such as health insurance premiums. However, the ITC rules for health insurance premiums are complex and require careful consideration to ensure compliance.
Compliance Tips: To avoid common billing mistakes associated with health insurance, it is essential to ensure that the correct GST rate and HSN code are used, and that ITC rules are complied with. Additionally, it is recommended to consult with a tax professional or accountant to ensure compliance with GST regulations.
Health insurance provides financial protection against medical emergencies and is essential in India due to the increasing cost of healthcare.
The GST rate on health insurance in India is 18%.
The HSN code for health insurance products is 998531.
Yes, you can purchase health insurance for your family, including spouse, children, and dependents.
Key factors to consider include coverage, premium, network hospitals, and claim settlement process.
Rate position checked against the GST Council's 56th meeting recommendations (3 September 2025) and the CBIC rate notifications 09/2025 to 17/2025-Central Tax (Rate) dated 17 September 2025, effective 22 September 2025.
