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0% GST on Travel Insurance - What Does it Mean?

Team AckoOct 7, 2025

The Goods and Services Tax (GST) on travel insurance premiums has now been reduced to 0%, which means you no longer pay any tax on your policy. Effective September 22, 2025, individual and family travel insurance policies in India will no longer be subject to an 18% GST on the base premium. This 0% GST exemption will reduce the overall cost of travel insurance, making it more affordable and accessible for travellers seeking essential protection.

In this blog, we'll discuss what 0% GST on travel insurance means and how this change affects your policies.

Contents

What is GST?
Why Has GST Been Removed on Travel Insurance?
What Does 0% GST Mean For Travellers?
Example: 18% GST vs. 0% GST
Why Does Travel Insurance Matter More Today?
Who enjoys the Biggest Savings in 0% GST on travel insurance?
Conclusion
Frequently Asked Questions

What is GST?

Goods and Services Tax (GST) is an integrated indirect tax levied on goods and services in India. Previously, travel insurance premiums used to attract an 18% GST and had been levied in line with most other general insurance products.

How Does it Apply to Insurance?

For example, if your travel insurance premium was ₹1,000, you had to pay an additional ₹180 as GST, making your total cost ₹1,180.

With the new update of 0% GST on travel insurance, you now only pay the base premium, i.e., ₹1,000. That’s an instant saving of 18%, without any compromise on coverage.

Why Has GST Been Removed on Travel Insurance?

The move to 0% GST is a policy-level decision to make travel insurance more affordable and accessible. Travel has become an integral part of life, whether for leisure, work, or education. However, many travellers still skip insurance because of the additional cost.

By eliminating GST:

Cheaper premiums make travel insurance easier to afford, thus encouraging a lot more people to get travel insurance.
This is especially helpful for students, budget travellers, and families, who can now include protection as a standard part of their trips.
Financial security improves, and fewer travellers are left vulnerable to risks abroad.
In short, the government’s intent is to promote financial protection for travellers by removing a major cost barrier.

What Does 0% GST Mean For Travellers?

Let’s look at the practical impact this has on your travel plans:

Lower premiums, same coverage

The biggest benefit is cost savings. The premium you see is the premium you pay, which means no hidden add-ons or taxes. This makes travel insurance more budget-friendly without compromising on the policy features.

Clearer pricing

Earlier, there was always a mismatch between the premium shown and the final price after GST was added. Now, with 0% GST, the price you see is the price you pay, which means no surprises.

Easier access for everyone

For many first-time travellers, students, and even senior citizens, the extra tax used to makes travel insurance feel like an added burden on their wallet or an unnecessary expense. With GST out of the way, policies are simpler, more affordable, and open to everyone.

Encouragement for frequent travellers

If you travel often for work or leisure, even small savings on each trip can really add up. Over the course of a year, lower premiums make travel insurance a smarter and more appealing choice for frequent flyers.

Read More: Multi-Trip vs Single-Trip Travel Insurance in India: What’s Best for You?

Example: 18% GST vs. 0% GST

Here’s a simple illustration of how the elimination of GST on travel insurance impacts you and your savings:

Travel Insurance Premium	GST @ 18% (Old rate)	Total Cost Earlier	Total Cost Now
₹500	₹90	₹590	₹500
₹1,000	₹180	₹1,180	₹1,000
₹2,500	₹450	₹2,950	₹2,500
₹5,000	₹900	₹5,900	₹5,000

Why Does Travel Insurance Matter More Today?

The 0% GST update makes travel insurance more affordable, but saving money is just one part of the picture. Today, travel insurance matters more than ever. Unexpected medical emergencies, trip cancellations, and lost luggage can be financially devastating, and global travel combined with rising costs makes this protection essential. Here are some situations where having travel insurance can really make a difference:

Medical emergencies abroad
Healthcare costs in foreign countries can be extremely high. Insurance helps ensure you don’t end up draining your savings.
Trip cancellations or delays
Sudden work commitments, natural disasters, or airline issues can disrupt your trip or lead to trip cancellation. Insurance covers your losses.
Lost baggage or passport
Losing a passport or baggage in a foreign land is extremely stressful. Insurance provides financial support and assistance services.
Student travel
Coverage for overseas students includes not just health but also study interruptions.
Family trips
One family travel insurance plan can protect the entire family, making group travel easier and worry-free.

Also, Read: What is the Risk of Going for a Tour without Travel Insurance?

Who enjoys the Biggest Savings in 0% GST on travel insurance?

Individuals, family travellers, and students enjoy the biggest savings from the 0% GST on international travel insurance, as the 18% tax previously charged on premiums is now removed.

While all travellers gain, certain groups stand to benefit even more:

Budget travellers - Every rupee saved makes a difference.
Students going abroad - Long-duration plans become more affordable.
Families - Savings are higher with multi-member plans.
Frequent business travellers - Cost-efficient coverage for multiple trips.
Senior citizens - More affordable access to critical medical protection abroad.

Conclusion

This change with travel insurance policies having 0% GST doesn't just help you save on tax; it also makes the decision to get protection on every trip a lot easier. When premiums are lower and there are no complicated pricing structures, it becomes easier for more and more people to afford travel insurance.

Whether you’re a student heading overseas, a family planning a vacation, or a professional travelling for work, now is the perfect time to add travel insurance to your checklist.

Frequently Asked Questions

Is 0% GST only for domestic travel insurance?

No. The 0% GST applies to all types of travel insurance policies, including domestic and international coverage.

Will the benefits of my travel insurance policy change because of 0% GST?

No. The change only impacts the premium amount you pay. Your policy's features, benefits, and claim process remain the same.

If I already bought my insurance, can I get the benefit of 0% GST?

No. The 0% GST benefit applies only to new policies bought after the update.

Does this apply to student travel insurance?

Yes. This change also benefits student travel insurance policies, making them more affordable for those studying abroad.

How much can I save on my travel insurance?

You save up to 18% of the premium amount. For example, on a ₹5,000 policy, you save ₹900. The higher the premium, the bigger the savings.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes. Please check the policy document for cancellation reasons, and terms and conditions of the policy.