By IANS,
Kolkata: India’s insurance regulator IRDA Saturday said it is holding talks with the union finance ministry for waiving the service tax on the savings part of life insurance premium.
There are demands from the country’s insurance industry that the central government should not levy service tax on the total amount of life insurance premium as apart from mortality charges, a portion of the premium goes towards investing in savings funds.
“Some people asked why would there be a service tax on savings segment of the premium. So there is a dialogue going on with the finance ministry… let us see,” Insurance Regulatory and Development Authority (IRDA) member (Life) Sudhin Roy Chowdhury told media persons on the sidelines of 6th ICC Insurance Summit.
Chowdhury, however, said the dialogue was still in a very lucid stage.
Several life insurers earlier said the central government should revisit the move of levying of service tax on premium in order to boost life insurance business in India.
Chowdhury also said he was hopeful that the sector would post a double-digit business growth this fiscal after experiencing a slowdown during the last three years.
“Real estate business is going through a dip, particularly in mega cities. And gold prices have also fallen. So, instead of putting money in gold and real estate, people are expected to spend more in insurance policies,” he contended.
Further higher growth in economy would also have repercussions on the country’s insurance industry, he observed.
The IRDA member hoped that the final guidelines on bancassurance will be in place by the next month.
Informing that the regulator was laying more thrust on the use of analytics in the industry, he said it has already set up a subsidiary – Insurance Information Bureau (IIB) – to collect comprehensive data for better product restructuring and pricing of policies.
“We are trying to make IIB a world class organisation to have a total picture of life insurance industry in the long-run,” he added.