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Life insurance companies want the current system of tax exemption for insurance maturity proceeds to be continued. The proposed Direct Taxes Code has suggested deduction of tax on the final payout, while exempting the policy premium at the time of contribution and the interest on it. The insurers have made a representation to the Government that the Exempt Exempt Exempt (EEE) method of computation should continue as against the Exempt Exempt tax (EET) method proposed in the Direct Taxes Code. Insurance products are driven by tax benefits.

The January-March quarter, which is the tax planning season, contributed 45-50 per cent of the total sales of the industry, said Mr Nageswara Rao, Chief Executive Officer, IDBI Fortis Life Insurance. The domestic insurance industry is at a nascent stage and taxing the maturity proceeds as proposed by the Direct Taxes Code will adversely impact the life insurance business and the industry. It will discourage investors to invest in long-term savings as it may result in unjustified tax burden especially on those customers who do not avail themselves of the benefit under Section 80C, said Mr T.R. Ramachandran, Chief Executive Officer and Managing Director, Aviva Life Insurance. 

Life insurers have been demanding for some time that service tax should be levied only on fund management charges. At present, the insurance industry has to pay service tax on fund management charges, risk premium, agents' commission and exit load. According to the insurers, this puts them at a disadvantage vis-a-vis mutual funds that need to pay service tax only on fund management charges. The insurers are hoping that the implementation of the Goods and Services Tax will ensure a level playing field between insurance polices and mutual fund schemes.

Carry forward of losses

Mr S.B Mathur, Secretary-General, Life Insurance Council, said the Government should consider increasing the period for carry forward of losses to 12 years from eight years at present. Companies have to incur huge expenditure for setting up their infrastructure for meeting their rural sector obligations, as mandated by the insurance regulator, Mr Mathur said. Some of the other demands of the industry include the creation of a separate category of savings under Section 80C of the Income-Tax Act, for tax exemption on investments in life insurance policies. Separate limit for tax exemption for long-term saving instruments such as life insurance or increasing the limits under Section 80C and 80D for tax exemption on life and health insurance premium could be one way to promote savings behaviour, said Mr Raman Garg, Deputy Chief Financial Officer, Max New York Life Insurance.

Service tax exemption

There needs to be some distinction between short-term savings and long-term savings. Otherwise, insurance products will lose out due to their long-term nature, Mr Mathur added. The Government may consider providing tax benefits such as service tax exemption for small ticket products where premium contribution is Rs 1,000 annually, Mr Garg said. The insurers are also demanding that the minimum alternative tax should not be levied on the assets of policyholders as they form a substantial part of the assets of the insurance company

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PME Due Date

Master Circular No. 25

Copy of Railway Board’s letter No. 69/H/3/11 dated 06.12.1974

Subject: Implementation of the Recommendations of the Visual Sub-Committee.

6. Periodical re-examination of serving Railway Employees:

6.l. In order to ensure the continued ability of Railway employees in Classes A l, A 2, A 3, B l and B 2 to discharge their duties with safety, they will be required to appear for re-examination at the following stated intervals throughout their service as indicated below:

6.1.1. Classes A l, A 2 and A 3 —At the termination of every period of three years, calculated from the date of appointment until they attain the age of 45 years, and thereafter annually until the conclusion of their service.

Note: (l) The staff in categories A l, A 2 and A 3 should be sent for special medical examination in the interest of safety under the following circumstances unless they have been under the treatment of a Railway Medical Officer.

(a) Having undergone any treatment or operation for eye trouble irrespective of the duration of sickness.

(b) Absence from duty for a period in excess of 90 days.

(2) If any employee in medical category A has been periodically medically examined at any time within one year prior to his attaining the age of 45, his next medical examination should be held one year from the due date of the last medical examination and subsequent medical examination annually thereafter.

If, however, such an employee has been medically examined, at any time earlier, than one year prior to his attaining the age of 45, his next medical examination should be held on the date he attains the age of 45 and subsequent medical examination annually thereafter.

Ammendment: It was ammended in 1993 as below

Age Group PME Due

Age 00-45 every 4yrs

Age 45-55 every 2yrs

Age 55-60 every year
As per Rly Bd's Guideline of Medical Exam issued vide LNo. 88/H/5/12 dated 24-01-1993

a) PME would be done at the termination of every period of 4 years from date of appointment / Initial medical Exam till the date of attainment of age of 45 years, every 2 years upto 55 years & there after annual till retirement.
b) Employees who has been periodically examined at any time within 2years prior to his attaining the age of 45years would be examined after 2years from the date of last PME & subsequent PME for every 2years upto 55years age.Of

NRMU 4 you

6.1.2. Classes B-1 and B-2—On attaining the age of 45 years, and thereafter at the termination of every period of five years.