India has removed the 18% goods and services tax (GST) on life and health insurance policies, following a decision at the 56th council meeting on Wednesday, 3 September.
Finance Minister Nirmala Sitharaman confirmed that the levies on all individual life policies, including term life, unit-linked insurance policies, endowment policies, family floater policies, policies for senior citizens, and reinsurance, have been removed.
The GST relief is expected to take effect on 22 September.
Mallu Bhatti Vikramarka, minister from the southern state of Telangana, previously stated that the exemption could lead to a revenue loss of 97bn rupees (US$1.1bn) for both states and the central government. However, he noted that it provides significant premium benefits to policyholders.
This move comes after years of pressure to scrap the 18% GST since July 2017, which prompted the council to form a group of ministers dedicated to medical and health insurance in September 2024.
The approval also aligns with Prime Minister Narendra Modi’s plan to cut taxes for consumers and businesses by October, in an effort to counterbalance the impact of US tariffs.
