GST on Health Insurance Premiums in India 2026 — Rate, SAC Code and ITC Eligibility

Health insurance GST is 18%. That much everyone knows. What most people get wrong: who can claim ITC on it, when the split changes between CGST+SGST and IGST, and how car insurance GST differs. Here is the complete picture — with worked rupee examples for policyholders, employers, and developers building insurtech tools.

The rate — confirmed and current

As of September 2025, the GST rate on all health insurance premiums in India is 18%. This applies to:

• Individual health insurance policies (Mediclaim, family floater, senior citizen plans)
• Group health insurance purchased by employers for employees
• Critical illness covers
• Top-up and super top-up health plans

The SAC code is 997133 — Health Insurance Services. This is the code your insurer uses on every premium invoice. If your premium invoice shows a different SAC code, ask your insurer to correct it — it affects ITC claims for eligible businesses.

Worked examples — how much GST you actually pay

These are intrastate figures — CGST and SGST split equally. If your insurer is registered in a different state from your policy address, IGST applies at 18% as a single line item. The total amount is identical.

ITC on health insurance — who can claim it

This is where most articles get it wrong, and where most businesses lose money by not claiming what they are entitled to.

Individuals — cannot claim ITC

If you are an individual buying a personal health insurance policy, the 18% GST you pay is a cost to you. You cannot claim it as ITC in your GST returns. It is not recoverable. The only tax benefit available is under Section 80D of the Income Tax Act — a deduction on the premium amount, not the GST.

Employers buying group health insurance — CAN claim ITC

This is the exception that most finance teams and CAs miss. Under Section 17(5)(b)(iii) of the CGST Act, ITC is blocked on health insurance except when it is provided as an obligatory statutory requirement — meaning the employer is legally required to provide it.

The Employees' State Insurance Act, the Factories Act, and certain state labour welfare acts mandate health coverage for specific categories of workers. When an employer buys group health insurance to comply with these statutory obligations — not voluntarily, but as a legal requirement — the ITC on the premium's GST component is claimable.

ITC example for eligible employers

₹90,000 recovered as ITC on a ₹5 lakh premium. For companies with hundreds of employees, this is a material number. Most finance teams leave this on the table.

GST on car insurance — the +900% searched question in 2026

The same 18% GST rate applies to all motor vehicle insurance — car, two-wheeler, commercial vehicle. The SAC code is 997134 (Motor Vehicle Insurance Services).

For logistics companies, delivery fleet operators, and cab aggregators — ITC on motor vehicle insurance GST is fully claimable because the vehicles are used directly in the course of business. For an individual buying personal car insurance, it is blocked.

All insurance SAC codes — complete reference

For developers: looking up insurance SAC codes via API

If you are building an insurtech platform, premium calculator, or insurance comparison tool, you need the SAC rate returned programmatically for each insurance category. The GST Accelerator SAC API returns the correct rate, the applicable condition, and the CBIC notification reference for every lookup.

# Direct SAC lookup for health insurance
curl -X GET https://gstaccelerator.in/v1/sac/997133 \
  -H "X-API-Key: your_key"

# Response
{
  "sac_code": "997133",
  "description": "Health insurance services",
  "tax_rates": {
    "igst": 18.0,
    "cgst": 9.0,
    "sgst": 9.0
  },
  "notification_ref": "11/2025-CT(Rate)",
  "effective_date": "2025-09-22"
}

For a premium calculator showing the GST breakdown — pass the SAC code, get the rate, multiply against the premium amount. The CGST/SGST vs IGST split depends on whether the insurer and policyholder are in the same state — pass supply_type accordingly.