GST on Car Insurance Premiums Stays at 18% Through 2026
Car insurance policies in India continue to attract a flat 18% GST in 2026, covering third-party liability, comprehensive cover and add-ons.
News · 1 min read · Published 24 July 2026
Written by Arjun Malhotra, Cars Editor
Highlights
- Car insurance policies in India continue to attract a flat 18% GST
- This covers third-party liability, comprehensive cover and standalone own-damage policies
- Add-on covers like zero depreciation and engine protection are taxed at the same 18% rate
As of 2026, all types of car insurance policies are subject to a flat 18% GST, with the rate applying uniformly to third-party liability, comprehensive coverage, standalone own-damage policies, and add-on covers like zero depreciation, engine protection or roadside assistance. This consistency at least makes total premium calculation predictable, even if the overall tax burden remains meaningful.
For most individual owners using their car for personal purposes, this GST paid on insurance cannot be reclaimed, unlike businesses that may be able to claim input tax credit in specific circumstances.
Buyers renewing policies should factor this 18% into their total budgeted premium rather than being surprised by it at payment time, since the rate applies consistently regardless of insurer or policy type.