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Stamp Duties In Life Insurance Policy

Stamp Duties In Life Insurance Policy

Stamp duty payable on a policy of life insurance is governed by the Indian Stamp Act, 1899. Section 2(19) of the Act defines a Policy of insurance to include a life-policy, and any policy insuring any person against accident or sickness, and any other personal insurance. Section 2(19A) of the Act defines a policy of group insurance to mean any instrument covering not less than fifty or such smaller number as the Central Government may approve, either generally or with reference to any particular case, by which an insurer, in consideration of a premium paid by an employer or by an employer and his employees jointly, engages to cover, with or without medical examination and for the sole benefit of persons other than the employer, the lives of all the employees or of any class of them, determined by conditions pertaining to the employment, for amounts of insurance based upon a plan which precludes individual selection.

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Schedule 47(D) of Schedule 1 to the Indian Stamp Act, 1899 lays down the manner of calculation of stamp duty on a policy of life insurance. The stamp duty is calculated at 0.02% per Rs.1000/- sum assured. If a policy of group insurance is renewed or otherwise modified whereby the sum insured exceeds the sum previously insured, duty is payable on the excess sum so insured.

On a Policy of annuity, stamp duty is calculated as follows:

1. Annuity Certain – Where the annuity is guaranteed for a predetermined period, the amount of stamp duty will be based on the total annuity amount payable during such certain period i.e. the annuity per annum multiplied by number of years.

2. Annuity for Life – Where the annuity is payable during the lifetime of the annuitant, the amount of stamp duty will be based on the annuity amount payable for 12 years.

Insurance Law And Practice - ICSI
Stamp Duties In Life Insurance Policy Stamp Duties In Life Insurance Policy Reviewed by Ikpokolo Francis on Wednesday, May 17, 2017 Rating: 5

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