Insurance Stocks Surge as Life and Health Insurance Exempt from GST.
PorAinvest
jueves, 4 de septiembre de 2025, 2:43 am ET1 min de lectura
PUK--
The 56th GST Council meeting, chaired by Sitharaman, approved a full GST exemption on all individual life and health insurance policies, slashing the existing 18% tax rate [1]. This exemption applies to a wide range of products, including term life insurance, ULIPs, endowment plans, and health insurance policies—such as family floaters and senior citizen plans—as well as associated reinsurance services [2].
Additionally, the GST on third-party insurance for goods carriages has been reduced from 12% to 5%, aimed at reducing compliance burdens and promoting broader coverage in the logistics sector [2].
The government stated that these reforms are part of a broader push to make insurance more affordable, expand access, and support the aspirational middle class under the GST regime [1]. Analysts expect the move to spur demand in the sector and potentially attract investor interest in insurance stocks.
India’s top five listed insurance companies by market capitalisation include Life Insurance Corporation of India (LIC), SBI Life Insurance, HDFC Life Insurance, ICICI Lombard General Insurance, and ICICI Prudential Life Insurance [2].
The announcement follows Prime Minister Narendra Modi’s Independence Day promise of a “Diwali gift” via a GST overhaul [2]. A Group of Ministers had reviewed the proposal before the Council approved it during its September 3–4 session [2].
References:
[1] https://timesofindia.indiatimes.com/business/india-business/gst-reforms-0-gst-on-individual-health-and-life-insurance-reduced-from-18/articleshow/123681997.cms
[2] https://economictimes.indiatimes.com/markets/stocks/news/hdfc-life-lic-other-insurance-stocks-in-focus-as-gst-council-announces-tax-exemption-for-life-and-health-policies/articleshow/123689612.cms
Insurance stocks surged on Thursday, with Star Health up 9.35%, as life and health insurance premiums are now exempt from GST. Finance Minister Nirmala Sitharaman announced the exemption for individual life insurance policies, health insurance policies, and reinsurance. The new rates will be effective from September 22. Key sectors set to benefit from this include insurance, FMCG, automobiles, and consumer durables.
New Delhi, September 2, 2025 — Insurance stocks surged on Thursday, with Star Health up 9.35%, as life and health insurance premiums are now exempt from GST. Finance Minister Nirmala Sitharaman announced the exemption for individual life insurance policies, health insurance policies, and reinsurance. The new rates will be effective from September 22, 2025.The 56th GST Council meeting, chaired by Sitharaman, approved a full GST exemption on all individual life and health insurance policies, slashing the existing 18% tax rate [1]. This exemption applies to a wide range of products, including term life insurance, ULIPs, endowment plans, and health insurance policies—such as family floaters and senior citizen plans—as well as associated reinsurance services [2].
Additionally, the GST on third-party insurance for goods carriages has been reduced from 12% to 5%, aimed at reducing compliance burdens and promoting broader coverage in the logistics sector [2].
The government stated that these reforms are part of a broader push to make insurance more affordable, expand access, and support the aspirational middle class under the GST regime [1]. Analysts expect the move to spur demand in the sector and potentially attract investor interest in insurance stocks.
India’s top five listed insurance companies by market capitalisation include Life Insurance Corporation of India (LIC), SBI Life Insurance, HDFC Life Insurance, ICICI Lombard General Insurance, and ICICI Prudential Life Insurance [2].
The announcement follows Prime Minister Narendra Modi’s Independence Day promise of a “Diwali gift” via a GST overhaul [2]. A Group of Ministers had reviewed the proposal before the Council approved it during its September 3–4 session [2].
References:
[1] https://timesofindia.indiatimes.com/business/india-business/gst-reforms-0-gst-on-individual-health-and-life-insurance-reduced-from-18/articleshow/123681997.cms
[2] https://economictimes.indiatimes.com/markets/stocks/news/hdfc-life-lic-other-insurance-stocks-in-focus-as-gst-council-announces-tax-exemption-for-life-and-health-policies/articleshow/123689612.cms
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