Union Government of India in the month of December granted service tax exemption on the services of life insurance business provided under the Aam Aadmi Bima Yojana (AABY) and Janashree Bima Yojana (JBY).
Aam Aadmi Bima Yojana (AABY) was launched in August 2007and it basically covers death and disability insurance for the benefit of rural landless households.
About Aam Aadmi Bima Yojana (AABY)
• AABY provides for insurance of the head of the family or earning member of the family of rural landless households between the age of 18 and 59 years against natural death or accidental death and partial/permanent disability.
• The annual premium payable is 200 rupees of which 50 per cent shall be payable by the Union Government and the remaining 50 per cent by the State Government.
The Centre has created a fund that is being operated by LIC for meeting the liability of the Central Government towards premium payment.
AABY also provides for educational assistance to the beneficiaries’ children studying from 9 to 12 Standard as an extended benefit. A separate fund has been created for providing scholarship to the children of beneficiaries.
About Janashree Bima Yojana (JBY)
• Janashree Bima Yojana (JBY) was launched in August 2000 and it provides life insurance protection to people who are below poverty line or marginally above poverty line.
• Persons aged between 18 years and 59 years and who are members of the identified 45 occupational groups are eligible to be covered under the scheme.
• The premium for the JBY is 200 rupees per member. While 50 per cent premium under the scheme is met out of Social Security Fund maintained by LIC, the balance 50 per cent premium is borne by the member and/or nodal agency.
The Granting of Tax Exemption is going to save some money of the government as the central contribution towards premium in the two schemes is 50% and the rest is contributed by state governments.
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