Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: articles on VAT and GST in India :: TDS :: ACCOUNTING STANDARDS :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: cpt
 
 
« Service Tax »
 Rules not ready, key e-way bill for GST may be delayed, says top official
 How Goods and Service tax will benefit the nation
 GST implementation may increase expense ratio of fund houses
 GST structure: an unfortunate compromise
 Extension Of Provisional Attachment Under Service Tax Provisins
 How favourable will GST be for Karnataka?
 GST rate impact: Here’s how the new tax can carry a greater punch
 E-way Bill - movement of goods under GST
 How the GST rates will affect your money
 GST: The coming disruption in the wholesale trade
  Ways In Which GST Will Impact The Average Indian’s Wallet

Service tax on insurance policies likely to pinch policy holders
January, 29th 2015

Be prepared to shell out service tax for traditional life insurance policies and see a reduction in designated units on unit-linked insurance plans (ULIPs) offered by private insurers.

For instance, the PLI (Postal Life Insurance) directorate of India Post has decided to collect the service tax on insurance premium from all PLI and rural PLI policy holders with effect from January 1.

The service tax works out to 3.09% (including education and higher education cess) of the gross premium during the first year and 1.545% (including education and higher education cess) from the second year. It is being collected from the policy holders separately and a consolidated receipt is being issued for the total amount i.e. premium plus service tax.

But officials from India Post, Chennai city region state the additional imposition of service tax won't have much impact on their overall business. "The additional 3% (service tax) on premium is a very minuscule amount. In any case, the bulk of our PLI (postal life insurance schemes) are on auto debit mode and now the service tax would also be debited in addition to premium," post master general, Chennai city region, Mervin Alexander said.

The Chennai city region of India Post currently has 3.16 PLI policies and 6.57 lakh RPLI policies in force. The average policy size in RPLI ranges from Rs. 50000 to Rs. 1 lakh in the region while in the case of PLI the average size was Rs. 5 lakh in Chennai city region.

The service tax has been expanded to cover a whole host of charges including policy administration and allocation charges, mortality charge and fund management charges on ULIPs by some private insurers recently.

Though the service tax will not impact the annual premium amount, it will result in lower units for ULIPs. "The tax will be adjusted by deducting the equivalent units from your account or by levying the same on the investment fund held by and on your behalf, as may be decided by the company from time-to-time," Aegon Religare said in its letter to a ULIP policyholder.

"We could not effect service tax on unit-linked plan charges in our plans after the union budget announcement a couple of years back. That was because our systems were not compliant to capture this earlier," chief distribution officer of Aegon Religare Amit Kumar Roy said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions