New Updates in Core Insurance Solution (PLI/RPLI) – GST on Default Fee, TDS on Payments & Revival Process Change

 The Core Insurance Solution (CIS) for Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) has been updated with new functionalities, effective February 8, 2025. These changes aim to enhance compliance with taxation laws and improve system efficiency.

1. GST on Default Fee in McCamish System

To comply with tax regulations, GST at 18% (9% CGST + 9% SGST) is now applicable on late fees, default fees, and interest collected on delayed premium payments for PLI and RPLI policies. The "Total GST" field in the system will now reflect this addition.

🔹 Key Update: GST will be calculated on both the premium amount and any applicable late fees.
🔹 Impact: Policyholders paying late fees will now see GST included in their receipts.

🚨 Technical Issues Noted: Some glitches have been observed in e-Banking/m-Banking (via POSB) & IPPB – M Banking. The technical team is working to resolve these issues as soon as possible.

2. Implementation of IT Section 194DA – TDS on Policy Payouts

As per Section 194DA of the Income Tax Act, TDS (Tax Deducted at Source) is now applicable on all PLI & RPLI disbursements that do not qualify for exemption under Section 10(D).

🔹 Key Update: Any payment related to PLI & RPLI policies will now be subject to TDS deductions if applicable.
🔹 Impact: Policyholders receiving payouts should check their TDS liability based on income tax regulations.

3. Employer Certificate Requirement Disabled During Revival Process

The requirement of an Employer Certificate during the revival process of PLI/RPLI policies has been removed to streamline policy revival.

🔹 Key Update: The system no longer mandates an employer certificate during policy revival.
🔹 Impact: Policyholders can revive their lapsed policies more conveniently.

Instructions to Field Offices

All field offices are requested to note these updates and inform concerned stakeholders for smooth implementation.

For further details or assistance, stay updated with official PLI/RPLI notifications.

📢 Stay tuned for more updates on PLI/RPLI policy changes!