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Service Tax on Insurance Premium
If policyholder pays a life insurance premium, whether service tax should be charged on full amount of premium or amount of risk involved in premium? How one can bifurcate the amount of risk involved in premium? And another query that, service tax rate is increased from 10% to 12% but from what date it would implement?
Replies (1)
Dear Friend,
The service tax is payable at the rate of 10%(+2% cess) on risk premium OR 1%(+2% cess)on total premium. It is an option given to insurance co.
This option is not available if the entire premium is towards risk premium- For Ex: term insurance policy.
If the premium includes both risk premium and premium for savings, then company based on the working of actuary makes the bifurcation.
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The increase in rate form 10% to 12% applicable wef the date on which Finance Bill get the assent of Persident of India.
TONY. M.P. , THRISSUR, KERALA
94470 80631
trc_mptony @ sancharnet.in
The service tax is payable at the rate of 10%(+2% cess) on risk premium OR 1%(+2% cess)on total premium. It is an option given to insurance co.
This option is not available if the entire premium is towards risk premium- For Ex: term insurance policy.
If the premium includes both risk premium and premium for savings, then company based on the working of actuary makes the bifurcation.
-------------
The increase in rate form 10% to 12% applicable wef the date on which Finance Bill get the assent of Persident of India.
TONY. M.P. , THRISSUR, KERALA
94470 80631
trc_mptony @ sancharnet.in
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