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    HomeNewsBusinessPersonal FinanceHigh service tax on life policy to lower return for holders

    High service tax on life policy to lower return for holders

    The government today proposed to increase the service tax on life insurance policies to 1.5% from 1%, a move that would increase the premium cost for policyholders.

    February 28, 2011 / 19:37 IST

    The government today proposed to increase the service tax on life insurance policies to 1.5% from 1%, a move that would increase the premium cost for policyholders.


    "It is being provided that tax shall be charged in the portion of the premium... the composition rate is also being increased from 1% to 1.5%," Finance Minister Pranab Mukherjee said in his 2011-12 Budget speech.


    "In case of traditional endowment plans, the service tax rate has been increased from 1.03% to 1.545%.

    Although the increase is marginal, there could be some increase in premium or returns might be lowered," Max New York Life Insurance CEO & Managing Director, Rajesh Sud said.

    first published: Feb 28, 2011 07:32 pm

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