Why this 81-year-old super senior citizen did not get GST relief on his health insurance

On September 22, 2025, people across India welcomed Navratri with joy and with a new reason to celebrate. The zero-GST gift on life and health insurance premiums brought relief to many households, but not for 81-year-old Kamlesh and his 76-year-old wife.

Like countless others, Kamlesh believed he would benefit from the tax exemption. After all, he had maintained his health insurance for years, through a public insurer, purchased via a public sector bank.

His premium included a full 18% GST. The total came to ₹37,681, of which ₹5,748 was tax alone. For a sum insured of ₹5 lakh, the gross premium was ₹31,933.

But when he went to renew it, the number on the bill had GST added, at first he thought may be it was a mistake, and got on a call to waive it off.

Only then did he learn the fine print of the government’s announcement: the exemption applied only to individual health insurance policies. His, unfortunately, was a group policy, and those were left out.

“I thought the new rule was for everyone,” he said quietly.

Why did this senior citizen missed out on GST relief?

This senior citizen missed out on GST relief on their health insurance premium because his policy was part of a group insurance scheme provided through PNB Oriental Insurance.

For him and his wife, the extra ₹5,748 was money that could have gone toward medicine, groceries.

While individual health insurance policies are offering GST free from September 22, group insurance policies do not qualify for the same reliefs. In this case, the GST charged on the premium under the group scheme was not eligible for exemption or relief.

This has left the policyholder bearing the full GST amount, unlike many individual policyholders who benefitted from reduced tax liability on health insurance premiums.

Which health insurance policies are covered under the GST exemption?

Do group health insurance qualify for zero-GST?

No, group health insurance policies are not exempt from GST; they continue to attract an 18% GST rate, as the GST exemption applies only to individual life and health insurance premiums, effective September 22, 2025. Group insurance policies, including those for corporates, senior citizens, and other group-based plans will attract GST.

Individual health insurance vs group health insurance

Ownership, flexibility in coverage, and cost structure are the main distinctions between individual and group insurance. A person can get individual insurance for themselves or their family directly. It gives the policyholder more control by letting them select the add-ons and the sum protected.

In contrast, group insurance is provided by an organisation, such as an employer or bank, to cover a group of people under one master policy. These plans are generally cheaper and often don’t require medical screening. Importantly, group policies are still subject to 18% GST, so policyholders like senior citizens may not benefit from the recent tax exemption, even if they’ve had the policy for years.