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.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
