Increase in service tax on insurance premium from 01/06/2015

Increase in service tax on insurance premium from 01/06/2015

General Insurance, Insurance in News, Life Insurance

It was proposed in in Union Budget 2015 to increase the service tax from 12.36% to 14%. After the Notification No. 14/2015-Service tax dated 19/05/2015 by the government, new servic tax will be effective from 01/06/2015. All the Service including the insurance premium will be dearer from 01/06/2015. The special rates for life insurance service as per rule 6(7A) has been changed. The rate ofservice tax for FY 2015-16 are as under:

Recent Updates: Increase in Service tax on Insurance premium to 15%

New Service Tax rates

S. No.ParticularsExisting rates (Upto 31/05/2015)Revised rates (From 01/06/2015)
A)On gross premium less amount is alloted for investment/savings, if such amount is intimated to the policy holder12.36%14%
B)Where the entire paid for risk cover12.36%14%
C)For all policies not covered under A) and B)
On First year premium3.09%3.50%
On subsequent premium1.55%1.75%

Life insurance service provided under Varishtha Pension Bima Yojana scheme has be exempted wef 01/04/2015.

Keep all the Insurance policies in electronic form with Insurance Repository

Keep all the Insurance policies in electronic form with Insurance Repository

Insurance in News, IRDA Updates

Role & Objectives of Insurance Repositories:
“Insurance Repository” means a company formed and registered under the Companies Act, 1956 and which has been granted a certificate of registration by Insurance Regulatory and Development Authority (IRDA) for maintaining data of insurance policies in electronic form on behalf of Insurers.
To implement the Insurance Repository System, IRDA has granted Certificate of Registration to the following five entities to act as Insurance

Repositories.
• NSDL Database Management Limited
Central Insurance Repository Limited
• SHCIL Projects Limited
Karvy Insurance Repository Limited
CAMS Repository Services Limited

A policy holder can buy and keep all the policies under an electronic Insurance Account (eIA) with any one of the Insurance Repository of his/her choice. The existing policies in physical mode too can be dematerialized and held in the eIA. The access to all the policies is then available at a click of a button. The Insurance Repository System not only provides policyholders a facility to keep insurance policies in electronic form but also enables them to undertake changes, modifications and revisions in the insurance policies with speed and accuracy. In addition, the Repository acts as a ‘single stop shop’ for policy servicing.