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.