Income Tax Act

Official PDF pages 671–675

SOURCE PDF PAGE 671
16.   Bauxite, Laterite, Aluminous Clays, Lithomarge, Titanium, Vanadium,
Gallium and Columbium minerals.
SCHEDULE XIII
[ See   section 45(2)]
LIST OF ARTICLES OR THINGS
1.   Beer, wine and other alcoholic spirits.
2.   Tobacco and tobacco preparations, such as, cigars and cheroots, ciga -
rettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco
and snuff.
3.   Cosmetics and toilet preparations.
4.   Tooth paste, dental cream, tooth powder and soap.
5.   Aerated waters in the manufacture of which blended flavouring concen -
trates (including synthetic essence) in any form are used.
6.   Confectionery and chocolates.
7.   Gramophones, including record players, and gramophone records.
8.   Projectors.
9.   Photographic apparatus and goods.
10.   Office machines and apparatus such as typewriters, calculating machines,
cash registering machines, cheque writing machines, intercom machines
and teleprinters including all machines and apparatus used in offices,
shops, factories, workshops, educational institutions, railway stations,
hotels and restaurants for doing office work and for data processing
including calculating machines and calculating devices not being com -
puters.
11.   Steel furniture, whether made partly or wholly of steel.
12.   Safes, strong boxes, cash and deed boxes and strong room doors.
13.   Latex foam sponge and polyurethane foam.
14.   Crown corks, or other fittings of cork, rubber, polyethylene or any other
material.
15.   Pilfer-proof caps for packaging or other fittings of cork, rubber, polyeth -
ylene or any other material.
SCHEDULE XIV
[ See   section 55]
INSURANCE BUSINESS
A.—Life insurance business
Profits of life insurance business to be computed separately.
1.   If a person is engaged in life insurance business during the tax year, the profits
and gains of such business shall be computed separately from profits and gains of
any other business.

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Computation of profits of life insurance business.
2.   (1) The profits and gains life insurance business shall be the annual average of
the surplus after adjusting the surplus or deficit disclosed by the actuarial valuation
made as per the Insurance Act, 1938 (4 of 1938) for the last inter-valuation period
ending before the commencement of tax year, so as to exclude from it any surplus
or deficit from any earlier inter-valuation period.
(2) Any expenditure which is inadmissible under section 34 in computing the profits
and gains of a business, shall be added to such profits and gains of life insurance
business.
Adjustment of tax paid by deduction at source.
3.   When an assessment of the life insurance business profits is made based on the
annual average of a surplus disclosed by a valuation for an inter-valuation period
exceeding twelve months, then, in computing the income-tax, payable for that year
credit shall––
( a )   not be given as per section 390 for the income-tax paid in the preceding
tax year;
( b )   be given for the annual average of the income-tax paid by deduction at
source from interest on securities or otherwise during such period.
B.—Other insurance business
Computation of profits and gains of other insurance business.
4.   (1) The profits and gains of any insurance business other than life insurance shall
be the profit before tax and appropriations as disclosed in the profit and loss account
prepared as per the Insurance Act, 1938 (4 of 1938) or the rules made thereunder
or the Insurance Regulatory and Development Authority Act, 1999 (4 of 1999) or
the regulations made subject to the following adjustments:––
( a )   subject to the other provision of  
51
[ this paragraph ] , any expenditure
or allowance including any amount debited to profit and loss account
either by way of a provision for any tax, dividend, reserve, or any other
provision as may be prescribed, which is inadmissible under sections 28
to 54 shall be added back;
( b )   any gain or loss from realisation of investments shall be added or de -
ducted, as the case may be, if not already credited or debited to the profit
and loss account;
( c )   any provision for diminution in investment value debited to the profit
and loss account, shall be added back; and
( d )   such amount carried over to a reserve for unexpired risks as may be
prescribed shall be allowed as a deduction.
(2) The amount payable under section 37, which is added under sub-paragraph (1)
( a ) shall be allowed as deduction in the tax year in which it is actually paid.
51.   Substituted for “this rule” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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52
[ (3) The amount not deductible under sub-clause ( i ) or ( ii ) of section 35( b ), which is
added under sub-paragraph (1)( a ), shall be allowed subsequently as a deduction in a
tax year in accordance with the provisions of the said sub-clause, as the case may be. ]
C.—Other provisions
Profits and gains of non-resident person.
5.   (1) The profits and gains of a person non-resident in India who is engaged in
the insurance business through its branches in India may, in the absence of more
reliable data, be deemed to be that proportion of his global income which corre -
sponds to the proportion which his premium income derived from India bears to
his total premium income.
(2) In this paragraph, the global income in relation to life insurance business of a
person not resident in India shall be computed as per this Act for computing the
profits and gains of life Insurance business carried on in India.
Interpretation.
6.   (1) For the purposes of this schedule,––
( a )   “investments” include securities, stocks and shares;
( b )   “life insurance business” means life insurance business as defined in
section 2( 11 ) of the Insurance Act, 1938 (4 of 1938).
(2) References to the Insurance Act, 1938 (4 of 1938) in this Schedule regarding
the Life Insurance Corporation of India shall be treated as references to that Act or
section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956).
SCHEDULE XV
[ See   section 123]
DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA,
CONTRIBUTION TO PROVIDENT FUND, SUBSCRIPTION
TO CERTAIN EQUITY SHARES, ETC.
Sums qualifying as deduction.
1.   For any tax year, the following amounts shall qualify as deduction for the purpose
of section 123—
( a )   premium paid for a life insurance policy––
( i )   in the case of an individual, on life of such individual, spouse of
the individual and any child of the individual;
( ii )   in the case of a Hindu undivided family, on life of any member of
the Hindu undivided family,
subject to paragraph 2;
( b )   sum paid under a deferred annuity contract other than the annuity plan
referred to in clause ( l ) on life of the individual, spouse of the individual
and any child of the individual, and such contract does not contain an
option to receive cash payment   in lieu   of the annuity;
( c )   sum deducted from salary payable by or on behalf of the Government
to any individual for securing deferred annuity or making provision for
his spouse or children, to the extent of 20% of salary;
52.   Inserted by the Finance Act, 2026, w.e.f.   1-4-2026 .

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( d )   contribution by an individual to any provident fund to which the
Provident Funds Act, 1925 (19 of 1925) applies;
( e )   contribution to an account with any provident fund, set up and notified
by the Central Government, in the name of,––
( i )   in the case of an individual, such individual, spouse of the individual
and any child of the individual;
( ii )   in the case of a Hindu undivided family, any member thereof;
( f )   contribution by an employee to a recognised provident fund;
( g )   contribution by an employee to an approved superannuation fund;
( h )   subscription to any security or deposit scheme notified by the Central
Government in the name of an individual or any girl child of that indi -
vidual, or any girl child for whom such person is the legal guardian, if
the scheme so specifies;
( i )   subscription to savings certificate as mentioned in section 3( k ) of the
Government Savings Banks Act, 1873 (5 of 1873), as may be notified by
the Central Government;
( j )   contribution for participation in Unit-linked Insurance Plan, 1971
specified in Schedule II of the Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002 (58 of 2002),––
( i )   in the case of an individual, in the name of such individual, spouse
of the individual and any child of the individual;
( ii )   in the case of a Hindu undivided family, in the name of any member
thereof;
( k )   contribution for participation in unit-linked insurance plan of Life
Insurance Corporation Mutual Fund, referred to in Schedule VII (Table:
Sl. No. 20 or 21), as may be notified by the Central Government,—
( i )   in the case of an individual, in the name of such individual, spouse
of the individual and any child of the individual;
( ii )   in the case of a Hindu undivided family, in the name of any member
thereof;
( l )   sum paid to effect or to keep in force a contract for annuity plan of the
Life Insurance Corporation or any other insurer notified by the Central
Government;
( m )   subscription to any units of any Mutual Fund referred to in serial number
20 or 21 of the Table in Schedule VII or from the Administrator or the
specified company under any plan formulated in accordance with such
scheme notified by the Central Government;
( n )   contribution by an individual to any pension fund set up by––
( i )   any Mutual Fund referred to in Schedule VII (Table: Sl. No. 20 or
21); or
( ii )   the Administrator; or

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( iii )   the specified company,
as may be notified by the Central Government;
( o )   subscription to a deposit scheme or contribution to a pension fund, set
up by the National Housing Bank established under section 3 of the
National Housing Bank Act, 1987 (53 of 1987), as may be notified by the
Central Government;
( p )   subscription to any deposit schemes of––
( i )   a public sector company engaged in providing long-term finance
for construction or purchase of houses in India for residential
purposes; or
( ii )   an authority constituted in India by any law, for the purpose of
dealing with and satisfying the need for housing accommodation
or for the purpose of planning, development or improvement of
cities, towns and villages, or for both,
as may be notified by the Central Government;
( q )   tuition fees (excluding any development fees or donation or payment of
similar nature) paid by an individual to any University, college, school
or other educational institution situated in India (at the time of admis -
sion or thereafter), for full time education of any two children of such
individual;
( r )   payment made for purchase or construction of a residential house prop -
erty the income from which is chargeable to tax under the head “Income
from house property” (or which would, if it had not been used for the
own residence of the assessee, have been chargeable to tax under that
head), subject to satisfaction of conditions laid down in paragraph 3;
( s )   term deposit for a fixed period of not less than five years with a sche-
duled bank, and which is as per such scheme framed and notified by the
Central Government;
( t )   subscription to   bonds issued by the National Bank for Agriculture and
Rural Development, as may be notified by the Central Government;
( u )   deposit in an account under the Senior Citizen Savings Scheme Rules,
2004;
( v )   five years term deposit in an account under the Post Office Time Deposit
Rules, 1981;
( w )   contribution by an employee of the Central Government to an additional
account referred to in section 20(3) of the Pension Fund Regulatory and
Development Authority Act, 2013 (23 of 2013) of the pension scheme
notified by the Central Government, as referred to in section 124—
( a )   for a fixed period of not less than three years; and
( b )   which is as per the scheme as may be notified by the Central
Government for the purposes of this clause;
( x )   contribution made from income chargeable to tax to effect or keep in
force a contract for any annuity plan of Life Insurance Corporation of
India or any other insurer for receiving pension from the fund referred
to in Schedule VII (Table: Sl. No. 3);