As per the records old tax on insurance premium and banking charges was 15% but with GST it goes up to level 18%. It means the charges of premium and also banking now goes up according to GST slab. Here in this blog post, we explain that facts about GST effects on insurance premium and bank charges below:
GST ON INSURANCE:
The tax slab in insurance sector before GST is like this, 15% on total tax that composed of 14% service tax, 0.5% Swachh Bharat Cess and 0.5% Krishi Kalyan Cess but now after GST there is single tax 18% on life insurance, health insurance and general insurance. Hence now it become costlier comparison to before. Some of the key point about this are below:
GST ON BANK SERVICE CHARGES:
Major key points for bank service charges are given below here:
GST ON INSURANCE:
The tax slab in insurance sector before GST is like this, 15% on total tax that composed of 14% service tax, 0.5% Swachh Bharat Cess and 0.5% Krishi Kalyan Cess but now after GST there is single tax 18% on life insurance, health insurance and general insurance. Hence now it become costlier comparison to before. Some of the key point about this are below:
- Life insurance policies where insurance is integrated by investment on that GST only applicable to the insurance amount only.
- Those policies associated with single premium liable to pay 10% of the premium amount as GST.
- For endowment policies first year premium will be liable to 4.50% tax,while subsequent annual premium be taxed at 2.25%.
- Any life insurance policy only for risk cover,not include investments or savings liable to 18% GST.
- Other insurance policies like theft insurance,fire insurance,vehicle insurance attracts 18% GST.
GST ON BANK SERVICE CHARGES:
Major key points for bank service charges are given below here:
- Old bank service charges be 15% but with GST it become higher 18% ,makes costlier services.
- Inter bank ATM transaction attracts 15% tax before GST but with GST it goes up to 18%.
- Business/corporate consumers can claim ITC for the taxes paid by them for official banking services.
As a conclusion GST makes banking services costlier as compared to older tax rates.
Some of the best Software products with GST:
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