How to claim Service Tax Exemption on Premium of LIC policies of NRI’s FNOI’s

Life Insurance Corporation of India (LIC) has stated by the circular dated 3/12/2015 that NRI’s will be exempted from service tax from their new policies as well as existing policies. Service Tax was introduced in all new policies commenced after 1st January 2014. Current Service tax rate applicable to all insurance policies except term plans and Health Insurance plans are at the rate of 3.625 % of first year premium and 1.8125 % of subsequent premiums. Service tax rates for Term plans and Health insurance plans will be 14.5%. This includes the Swatch Bharath Cess of 0.5 % introduced on 1 st June 2015.

Procedure to be followed by NRI’s to get exempted from paying service tax for LIC Policies

In order to get exemption from paying service tax for existing policies or new policies, following documents have to be submitted at the concerned branch office.

1. Proof of residence that the policyholder was residing outside India (any one of the documents)(a)Attestation by Attorney/Indian Embassy affirming the place of residence (b)Rent/ownership agreement of the place of residence(c)Latest utility bills
2. A self declaration stating that he/She is not a resident of India in that year
3. Passport copy that reflects the trips to india in that year