Effective 1 June 2016, Service Tax of 15% will be levied on all insurance premiums.
Budget 2016 has proposed to impose the Krishi Kalyan Cess @ 0.5% on all taxable services. The proceeds of Krishi Kalyan Cess would be exclusively used for financing initiatives related to improvement of agriculture and welfare of farmers.
All premiums due before 01/06/206 will be payable as per the existing rate of 14.5% but if due premium payment is delayed then the new rate of 15% will be charged in addition to the penalties chargeable.
Renewed renewal notices will be issued for all those policy holders whose premiums are due on & from 01/06/2016.