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June 2011

Notification No. 35/2011, dated 25-4-2011.

By Tarun Ghia
Brijesh Cholera
Pratik Mehta
Chartered Accountants
Reading Time 1 mins
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By this Notification, the optional scheme available in Rule 6(7A) of the Service Tax Rules, 1994 has been amended, so that the insurer carrying Life Insurance business will have the option to pay tax on that portion of the premium which is not invested, when such break-up is given to the policyholder. Where the break-up is not so provided, tax amount shall be 1.5% of the gross premium. However, where the entire premium is only for the risk portion, the same shall constitute the taxable value of the service.

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