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

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.	Particulars	Existing 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 holder	12.36%	14%
B)	Where the entire paid for risk cover	12.36%	14%
C)	For all policies not covered under A) and B)
	On First year premium	3.09%	3.50%
	On subsequent premium	1.55%	1.75%

Life insurance service provided under

Varishtha Pension Bima Yojana

scheme has be exempted wef 01/04/2015.