Service Tax - Aam Admi Insurance Exempted
JANASHREE Bima Yojana: The objective of the scheme is to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above the poverty line. The insurance cover is for Rs. 30,000/-. The premium under the scheme is Rs.200/-per annum per member. 50% of the premium i.e. Rs. 100/- will be contributed by the member and/or Nodal Agency/State Government. Balance 50% will be borne by the Social Security Fund.
Aam Aadmi Bima Yojana: is a scheme of the Central and State Governments administered by LIC. This Scheme insures head of the family or one earning member in the family of rural landless household, for a sum of Rs. 30,000/-. The annual premium under the scheme isRs.200/- out of which 50% is subsidized from the Fund created for this purpose by the Central Government and the remaining 50% is to be contributed by the State Government.
Now the Government has exempted Services of life insurance business provided under the above two schemes from Service Tax.
Who benefits from the exemption? The Government of course - the premia were paid by the Government and now they need not pay Service Tax on the premium. Government has given itself a big benefit.
Notification No. , Dated: December 24, 2012