Zero GST on Life and Health Insurance

Government’s Announcement and Key Highlights

The GST Council, in its 56th meeting, enacted a landmark policy for every household. It announced zero GST on life and health insurance. Finance Minister Nirmala Sitharaman confirmed the complete removal of the 18% tax previously applied to individual life and health insurance policies. This new regulation takes effect on September 22, 2025.

The government’s stated goal is to make insurance affordable and expand its reach across India. This policy is a major step toward greater financial inclusion, giving more families a direct path to secure their future.

Here are the key details of the announcement:

Impact on Policyholders and New Buyers

This tax removal directly lowers the cost of your insurance premiums. The reduction in the GST on life insurance and the GST on health insurance provides a necessary counter to rising medical inflation.

While the 18% tax is gone, do not expect a full 18% drop in the final price. Insurance companies can no longer claim input tax credits on their operational expenses. A small portion of these internal costs, estimated at 3-4%, will likely be factored into the base premium.

Even with this internal adjustment, the net savings for you remain significant. The final premium you pay will be substantially lower than before. This change makes vital family protection more affordable. The introduction of the new GST for life insurance and the new GST for health insurance is a clear win for the public, bringing financial security within reach for millions.

Conclusion

The government has removed the final cost barrier to your family’s protection. The rule for zero GST on life and health insurance brings vital financial security within reach for millions. Your path to protecting your loved ones is now clearer and more affordable. This is the moment to secure the life and health coverage your family deserves, without the unnecessary tax burden.

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