India Removes GST on Life and Health Insurance Premiums from September 22

In a landmark move, the GST Council in India has exempted all individual life and health insurance premiums from the current 18% tax, effective September 22. Announced by Finance Minister Nirmala Sitharaman after the 56th Council meeting, the reform comes as a major relief for Indian policyholders. Until now, premiums attracted heavy tax burdens, e.g., a ₹20,000 annual premium required an additional ₹3,600 in GST. With the exemption, customers in India will now pay only the base premium quoted by insurers.

Impact on Global Healthcare:

This policy is expected to significantly reduce costs, encourage more individuals to opt for insurance, and improve healthcare access. Globally, it sets a precedent for making insurance more affordable, potentially influencing similar reforms in emerging economies.

Economic Significance:

The exemption is likely to accelerate insurance penetration in India, reduce out-of-pocket health expenses, and promote financial inclusion. Easing household healthcare spending can strengthen savings and support broader economic stability in the long term.