AIBEA Urges Finance Minister to Waive GST on Medical Insurance Premiums for Retired Bank Employees

Chennai, September 4, 2025 -The All India Bank Employees’ Association (AIBEA) has appealed to Finance Minister Nirmala Sitharaman seeking exemption of Goods and Services Tax (GST) on group medical insurance premiums paid by retired bank employees and senior citizens.

In a letter addressed to the Finance Minister, AIBEA highlighted that while banks bear the insurance premium costs for in-service staff, retired employees and officers are required to pay the premium themselves. Consequently, GST on these premiums also becomes an additional financial burden for retirees.

The union pointed out that medical insurance premiums for retirees have steadily risen in recent years. On top of this, the 18% GST has further escalated costs. For instance, under the current policy, retired employees have paid ₹4,354 as GST on a premium of ₹24,191 for a basic cover of ₹3 lakh, while retired officers have paid ₹6,239 as GST on a premium of ₹34,661 for a cover of ₹4 lakh. The burden grows even heavier if retirees opt for higher coverage.

“We have been repeatedly representing to the Government a waiver of GST on the premium paid under group medical insurance policies for senior citizens,” AIBEA General Secretary C.H. Venkatachalam wrote in the letter.

The association welcomed recent reports that the GST Council, in its meeting held on September 3, decided to exempt GST on medical insurance policies for individuals. However, AIBEA expressed concern that this exemption does not extend to group policies, under which retired bank staff are insured.

AIBEA has urged the Finance Minister to reconsider and extend the exemption to group medical insurance policies for retirees and senior citizens, arguing that such relief would significantly ease their financial strain.