TaxTMI 
TaxTMI 
Comparison of SCHEDULE XIV "INSURANCE BUSINESS" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....& Scope Statutory hook: Schedule XIV is attached to the Income-tax Act (See section 55). It sets special computation rules for profits and gains of insurance businesses. Scope: the Schedule divides into A (Life insurance business), B (Other insurance business), and C (Other provisions). The text includes references to actuarial valuations made under the Insurance Act, 1938 (4 of 1938), and to the Insurance Regulatory and Development Authority Act, 1999 (4 of 1999), and the Life Insurance Corporation Act, 1956 (31 of 1956) for references to LIC. Definitions provided: "investments" and "life insurance business" (as defined in section 2(11) of the Insurance Act, 1938). The documents supply other operative phrases used throughout the Schedule.....
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....acks and allowances: (a) add back inadmissible expenditures/allowances (including provisions for tax, dividend, reserve, or any other provision as may be prescribed) inadmissible u/ss 28 to 54; (b) add/deduct gains or losses on realisation of investments if not already in P&L; (c) add back provisions for diminution in investment value debited to P&L; (d) allow as deduction amounts carried to a reserve for unexpired risks as may be prescribed. * Paragraph B(2): Amounts added under B(1)(a) that are payable u/s 37 shall be allowed as a deduction in the year actually paid. * Paragraph C(5): For non-residents operating insurance via branches in India and in absence of reliable (or "more reliable") data, profits may be deemed as the proportio....
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....uded as per cross-reference and averaging of TDS credits is allowed. * For non-life insurers, certain amounts carried to reserve for unexpired risks are specifically allowed as deductions "as may be prescribed". * Amounts added back under paragraph B(1)(a) but payable u/s 37 are allowed when actually paid (timing proviso). Illustrations * Example 1: A life insurer with actuarial valuations covering an inter-valuation period of 18 months would compute the taxable life-insurance surplus as the annual average of the surplus from the last inter-valuation period, excluding earlier inter-period surplus/deficits; while computing tax the section A(3) rules on credit for prior-year tax and TDS averaging apply. (Illustration consistent with te....
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....e. * Phraseology in paragraph 4(a): Document 1 adds the introductory qualification "subject to the other provision of this rule," before listing items to be added back, whereas Document 2 omits that introductory phrase. * Practical impact: The added qualification in Document 1 signals that the add-back in clause (a) may be limited by other provisions within the same rule (i.e., Schedule paragraph 4). That can narrow or contextualise the sweep of add-backs; Document 2's broader wording may be read as more absolute. The documents do not identify which "other provision" is intended to limit clause (a). Not stated in the document: the specific provisions that would limit clause (a). * Wording relating to availability of data for non-r....
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.... reliance on delegated legislation. The documents do not provide the delegated rules/regulations. Practical Implications * Compliance and risk areas: Life insurers must ensure actuarial valuations and the method of annual averaging comply strictly with the Schedule's requirements; misapplication of inter-valuation adjustments or incorrect treatment of inadmissible expenditures may expose taxpayers to reassessment. For non-life insurers, careful reconciliation between statutory P&L items and tax adjustments (add-backs for inadmissible items, treatment of realisation gains/losses and diminution provisions) is required. The precise cross-reference in paragraph A(3) determines availability of prior-year tax credits; divergence across dra....