Tax on profits and gains of Life Insurance business - Section 115B

Tax on life insurance profits: mandatory social security fund deposit can reduce the tax payable under the statutory scheme.

Life insurance business profits are subject to a specific income tax at a 12.5% rate; additionally the assessee must deposit 33 and one third percent of that income tax into a notified social security fund. If the assessee deposits at least 2.5% of the profits into the security fund during the previous year, the income tax is reduced by that 2.5% of profits and the 33 and one third percent contribution is computed on the reduced tax.