Life insurance exemption tightened by period, premium ratio and aggregate premium tests, altering tax treatment of policy and IFSC receipts.
Schedule II excludes specified classes of income from total income while imposing conditional tests on life insurance and retirement/savings receipts. Life insurance exclusions depend on policy issue periods, premium to sum assured ratios, aggregate premium ceilings and express ineligibility for certain receipts. Provident fund interest attributable to large post cut off contributions is excluded from exemption with the non excluded portion to be computed as prescribed. The Schedule adds an equalisation levy exclusion interacting with treaty notifications and treats IFSC issued policies differently under a targeted aggregate premium carve out.