Tax on life insurance profits: 12.5% plus tax on remaining income; social security deposit rules and 2.5% reduction
Where an assessee's total income includes profits and gains from life insurance business, tax equals (i) tax on those life-insurance profits at 12.5% plus (ii) the tax on the remainder of total income computed as if the life-insurance profits were excluded. For the previous years relevant to the assessment years beginning 1 April 1989 and 1 April 1990, the assessee must also deposit an amount equal to 33?% of the tax computed under (i) into a government-notified social security (security) fund. If the assessee deposits at least 2.5% of the life-insurance profits into that fund, the tax under (i) is reduced by that 2.5% and the 33?% deposit is calculated on the reduced tax.
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