When “GST Relief” Became A Mirage For An 81-Year-Old Senior

An 81-year-old super senior citizen, Kamlesh Tiwari, was in for a rude shock when he failed to get the recently announced Goods and Services Tax (GST) relief on his health insurance premium. He had expected his renewal to reflect the government’s September 2025 decision exempting individual health and life insurance policies from GST. However, his bill still carried the full 18 per cent tax, according to a recent media report.

Tiwari, who, along with his 76-year-old wife, is insured under a group health cover through a public sector bank, ended up paying Rs 37,681 in total. This included Rs 5,748 as GST on a base premium of Rs 31,933. Hoping for a waiver, he approached the insurer only to be told that his policy did not qualify under the new regime.

Why The Senior Citizen Did Not Qualify

The hitch was hidden in the details. The government’s GST relief was meant only for individual health insurance policies—be it a standard plan, a senior citizen policy, or even a family floater—taken directly by a person in their own name.

These policies, along with their reinsurance, have been made tax-free with effect from September 22, 2025.

Group health insurance, however, continues to attract GST. Covers that come bundled through banks, workplaces, or member associations have been kept out of the GST waiver. Since Tiwari’s cover was under a group scheme, the tax benefit did not apply.

Though group covers are often attractive because of lower premiums and minimal medical screening, they can turn costlier when benefits such as tax relief are denied.

What Policyholders Should Keep In Mind

This case highlights why policyholders should not assume that headline announcements apply across the board. Here are some key pointers:

Check Your Policy Type

Only individual policies enjoy GST exemption; group covers do not.

Explore Conversion Options

If viable, shifting from a group scheme to an individual plan may help avail tax benefits.

Scrutinise Renewal Documents

Always verify if GST has been added where it should not be.

Seek Written Clarity

Engage with your insurer or agent to confirm eligibility under the new rules.

For Tiwari, the promise of tax relief remained out of reach. For others, a careful reading of the policy structure could make the difference between savings and an unexpected extra outgo.