THE FIRST SCHEDULE
INSURANCE BUSINESS
[See
section 44]
A.—Life insurance business
Profits of life
insurance business to be computed separately.
1. In the case of a person who carries on or at
any time in the previous year carried on life insurance business, the profits
and gains of such person from that business shall be computed separately from
his profits and gains from any other business.
[Computation of profits
of life insurance business.
2. The profits and gains of life insurance
business shall be taken to be the annual average of the surplus arrived at by
adjusting the surplus or deficit disclosed by the actuarial valuation made in
accordance with the Insurance Act, 1938 (4 of 1938), in respect of the last
inter-valuation period ending before the commencement of the assessment year,
so as to exclude from it any surplus or deficit included therein which was made
in any earlier inter-valuation period.]
Deductions.
3. [Omitted by the Finance Act, 1976, w.e.f. 1-4-1977. Earlier, the rule was first amended by the
Finance Act, 1966, w.e.f. 1-4-1966 and by the Finance
Act, 1965, w.e.f. 1-4-1965.]
Adjustment of tax paid
by deduction at source.
4. Where for any year an assessment of the
profits of life insurance business is made in accordance with 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 not be given in accordance with section 199 for the income-tax paid in
the previous year, but credit shall 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.
5. The profits and gains of any business of
insurance other than life insurance shall be taken to be the balance of the
profits disclosed by the annual accounts, copies of which are required under
the Insurance Act, 1938 (4 of 1938), to be furnished to the Controller of
Insurance, subject to the following adjustments:—
(a) subject to the other provisions of this rule, any expenditure or
allowance [including any amount debited to the 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 not admissible under the provisions of sections 30
to [43B] in computing the profits and gains of a business shall be added back;
(b) [***]
(c) such amount carried over to a reserve for
unexpired risks as may be prescribed in this behalf shall be allowed as a
deduction.
C.—Other provisions
Profits and gains of
non-resident person.
6. (1) The profits and gains of the branches in
India of a person not resident in India and carrying on any business of
insurance, may, in the absence of more reliable data, be deemed to be that
proportion of the world income of such person which corresponds to the
proportion which his premium income derived from India bears to his total
premium income.
(2) For the
purposes of this rule, the world income in relation to life insurance business
of a person not resident in India shall be computed in the manner laid down in
this Act for the computation of the profits and gains of life insurance
business carried on in India.
Interpretation.
7. (1) For the purposes of these rules—
(i) [***]
(ii) “investments” includes securities, stocks
and shares;
(iii) [***]
(iv) “life insurance business” means life insurance business as defined in clause (11) of
section 2 of the Insurance Act, 1938 (4 of 1938) ;
(v) “rule” means a rule contained in this
Schedule.
(2)
References in these rules to the Insurance Act, 1938 (4 of 1938), or any
provision thereof, shall, in relation to the Life Insurance Corporation of
India, be construed as references to that Act or provision as read with section
43 of the Life Insurance Corporation Act, 1956 (31 of 1956).