The government is contemplating a slew of tax incentives to make life insurance policies more attractive for investors and increase penetration of insurance in the country.
Among other things, the Finance Ministry is looking at the possibility of exempting first year premium from service tax and extending the scope of the tax exemption scheme to cover more life insurance policies.
“I have asked the Department of Revenue and the Central Board of Direct Taxes/Central Board of Excise and Customs to complete the examination of (various) ... suggestions by October 10 so that appropriate decisions may be announced shortly thereafter,” Finance Minister P. Chidambaram told reporters here.
The Minister further said he had asked the CBEC to look at the possibility of reducing service tax on first year regular premium as well as single premium policies.
