Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Case LawsIncome Tax
    Upholding the Transfer of Assessment Proceedings u/s 127: A Judicial Perspective
    Case LawsService Tax
    Navigating the Taxation Labyrinth: The Supreme Court's Guidance on Transfer of Right to Use Goods
    Case LawsIndian Laws
    Supreme Court Upholds Forfeiture of Earnest-Money Deposits under SARFAESI Rules
    Case LawsIndian Laws
    The Generality vs. Enumeration Principle: A Key to Interpreting Delegated Rule-Making Power: Validit...
    Case LawsIncome Tax
    Share Premium Addition u/s 68: Demystifying Share Premium Transactions
    Case LawsIncome Tax
    Navigating the Intricacies of Income Tax Penalty u/s 271(1)(c): Fairness in Tax Administration
    Case LawsIndian Laws
    Ensuring Fair Procedure before declaring Fraud in Bank Loan: Providing Relevant Documents and Opport...
    Case LawsIncome Tax
    Reassessment Proceedings: Navigating the Scope and Limitations under Income Tax Act
    Case LawsIncome Tax
    Navigating the Complexities of Search and Seizure Assessments: Unraveling the Intricacies of Section...
    Case LawsGST
    Decoding the Judgement: Navigating the Complexities of ITC Eligibility under the GST Regime
    Case LawsGST
    Excess stock found during survey: Navigating the Intricacies of UPGST / CGST Act and Invoking Wrong ...
    Case LawsGST
    Striking a Balance: Judicial Interpretation of GST Provisions on Record-Keeping and Penalties
    Case LawsIndian Laws
    Interim Orders and the Limits of Article 142: Safeguarding Natural Justice Balancing Judicial Powers...
    Case LawsIBC
    Upholding Fairness and Transparency in Insolvency Resolution: A Landmark Judgment on the IBC
    Case LawsIndian Laws
    Supreme Court Clarifies Vicarious Liability of Directors in Cheque Dishonour Cases
    Case LawsIndian Laws
    Interim Compensation in Cheque Dishonor Cases: Discretion and Due Process, Scope of the word "May"
    Case LawsIndian Laws
    Unraveling the Principles of Delay Condonation: A Comprehensive Analysis by the Supreme Court
    Case LawsIncome Tax
    Interpreting Section 80G Provisions: ITAT's Stance on Charitable Institution Registration
    Case LawsCustoms
    Monetary Limits for Filing Appeals: Analyzing the CESTAT Judgment on Binding Nature of CBIC Instruct...
    Case LawsIncome Tax
    Interpreting the Scope and Limits of Sections 153A and 153C: A Judicial Perspective
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsIncome Tax
    Upholding the Transfer of Assessment Proceedings u/s 127: A Judicial Perspective
    Show AI Summary
    Transfer of assessment proceedings for coordinated investigations and administrative convenience upheld where procedural safeguards and factual links exist.
    The judgment explains that transfers of assessment proceedings pursuant to the statutory transfer power may be justified for coordinated enquiries and administrative convenience, provided the decision is not capricious or mala fide. Authorities must afford an opportunity to be heard and consider objections; where factual indicia exist - for example, disclosed transactions such as unsecured loans with searched persons - centralisation can be sustained. The convenience of the assessee is relevant but subservient to effective adjudication and tax collection, and transfers supported by procedural compliance and factual nexus are not arbitrary.
    Case LawsService Tax
    Navigating the Taxation Labyrinth: The Supreme Court's Guidance on Transfer of Right to Use Goods
    Show AI Summary
    Transfer of right to use goods: contracts retaining operational control are service arrangements, not deemed sales under VAT.
    The issue is whether supply agreements for cranes, trailers and tank trucks amount to a transfer of the right to use goods under the deemed sale provision. Applying the five BSNL tests-availability of goods, consensus on identity, transferee's legal right to use, exclusivity of use, and non transferability by owner-the contracts failed to meet the criteria. Contractors retained possession, crew, fuel, maintenance and liability, and transferees had only permissive use without effective control, so the arrangements were services, not deemed sales under VAT/sales tax.
    Case LawsIndian Laws
    Supreme Court Upholds Forfeiture of Earnest-Money Deposits under SARFAESI Rules
    Show AI Summary
    Forfeiture of earnest-money deposits under SARFAESI rules stands as a statutory consequence, limiting equitable intervention.
    The analysis affirms that Rule 9(5) of the SARFAESI Rules prescribes an express statutory forfeiture of earnest-money deposits arising from auction terms, and that Sections 73 and 74 of the Indian Contract Act, 1872, addressing contractual damages, do not apply to such statutory forfeitures. Unjust enrichment and equitable considerations cannot supplant a clear statutory forfeiture, and subsequent recovery by the secured creditor does not negate the forfeiture, except in narrowly defined exceptional circumstances where equity may justify relief.
    Case LawsIndian Laws
    The Generality vs. Enumeration Principle: A Key to Interpreting Delegated Rule-Making Power: Validit...
    Show AI Summary
    Generality vs. enumeration principle affirms broad delegated rule making power, upholding rules that further an Act's statutory purposes.
    The Court held that Rule 9(3) is intra vires because the general delegated rule making power in section 29A(1) authorises rules that carry out the Act's purposes even when not covered by enumerated heads. Applying the generality vs. enumeration principle, the Court found the enumerated matters in section 29A(2) illustrative and not restrictive, and concluded Rule 9(3) furthers the misconduct chapter's object of maintaining ethical standards and preventing wrongful threshold dismissal of genuine complaints.
    Case LawsIncome Tax
    Share Premium Addition u/s 68: Demystifying Share Premium Transactions
    Show AI Summary
    Burden of proof in share premium cases: failure to prove investor identity and genuineness sustains addition under section 68.
    The assessment of share premium under section 68 requires the assessee to prove the identity, creditworthiness and genuineness of investors who subscribe at a premium. The court scrutinised disparate allotments made on consecutive days, examined subscribing companies' financials, and applied the doctrine of "source of source" restrictively, holding that incorporation papers or bank payments alone do not discharge the burden. Absent cogent evidence tracing funds to lawful origin and demonstrating commercial rationale for large premiums, additions under section 68 are supportable.
    Case LawsIncome Tax
    Navigating the Intricacies of Income Tax Penalty u/s 271(1)(c): Fairness in Tax Administration
    Show AI Summary
    Strict construction of penalty provisions prevents penalty where taxpayer disclosed omitted income before assessment notice.
    The legal focal point is whether Section 271(1)(c) can be invoked where an assessee disclosed omitted income and paid differential tax before initiation of reassessment. Penal provisions require strict construction, and Explanation 1 treats a pre-notice satisfactory explanation and admission of additional income as accepted, precluding characterization as concealment. Additionally, a penalty notice must specify the particular ground for proceeding; failure to do so renders the notice defective and undermines the basis for penalty.
    Case LawsIndian Laws
    Ensuring Fair Procedure before declaring Fraud in Bank Loan: Providing Relevant Documents and Opport...
    Show AI Summary
    Right to be heard: affected parties must receive documents underlying fraud allegations and be allowed inspection and rebuttal.
    Classification of a loan account as fraud invokes the Principles of Natural Justice, requiring disclosure of the documents forming the basis of a Show Cause Notice and inspection access to bank and Resolution Professional records so the affected party can identify required documents, receive copies, and submit a meaningful reply within specified timelines, with scope to request a personal hearing.
    Case LawsIncome Tax
    Reassessment Proceedings: Navigating the Scope and Limitations under Income Tax Act
    Show AI Summary
    Scope of reassessment: AO may address newly noticed income but remains constrained by the recorded reasons for reopening.
    Where the AO has recorded reasons to believe income escaped assessment, the AO may assess or reassess issues that come to notice during reassessment, but if no additions or modifications are ultimately made in respect of the issues that formed the basis for reopening, the AO cannot make additions or modifications relating solely to other matters that were part of the original assessment. Explanation 3 applies only after reassessment power is validly invoked and cannot be used to deviate from or supplant the recorded reasons.
    Case LawsIncome Tax
    Navigating the Complexities of Search and Seizure Assessments: Unraveling the Intricacies of Section...
    Show AI Summary
    Corroboration requirement for search statements: unsupported search statements cannot sustain additions without linked incriminating material and fair cross examination.
    Additions for alleged accommodation entries cannot rest solely on statements recorded during search operations; such statements require corroboration by material found in the search that is specifically linked to the assessee. The assessing officer must articulate a factual nexus between seized group material and the assessee, and procedural fairness-including provision of relevant statements and opportunity for cross-examination-is essential. Cure provisions do not validate jurisdictional defects arising from absence of requisite notice or lack of incriminating material.
    Case LawsGST
    Decoding the Judgement: Navigating the Complexities of ITC Eligibility under the GST Regime
    Show AI Summary
    Input Tax Credit eligibility clarified: refund for unutilised ITC limited to inverted duty where input goods tax exceeds output supplies.
    The court construes Section 54(3) narrowly: refund of unutilised ITC for inverted duty arises only where tax on input goods exceeds tax on output supplies. It upholds the constitutional validity of Section 16(2)(c) and Section 16(4), confirms that ITC is subject to legislatively prescribed conditions and time limits, and clarifies that the non-obstante clause in Section 16(2) does not override separate restrictions such as Section 16(4). Affected petitioners may invoke circulars and have eligible ITC claims processed where returns met the prescribed extended filing position.
    Case LawsGST
    Excess stock found during survey: Navigating the Intricacies of UPGST / CGST Act and Invoking Wrong ...
    Show AI Summary
    Determination of tax on unaccounted stock must proceed under Sections 73 and 74, not Section 130.
    The Court held that tax determination for excess or unaccounted stock discovered in a survey must proceed under the statutory assessment procedures for undisclosed goods rather than by invoking the survey provision. The assessment code prescribes the exclusive mechanism for quantifying and demanding tax, and survey powers cannot be used to supplant the prescribed steps for computation, notice and imposition of tax or penalty on unaccounted goods.
    Case LawsGST
    Striking a Balance: Judicial Interpretation of GST Provisions on Record-Keeping and Penalties
    Show AI Summary
    Record-keeping obligations: failure attracts a capped statutory penalty and invalidates arbitrary confiscation without due process.
    The judgment emphasises that registered persons must maintain prescribed books and electronic records under Section 35 and related rules, and that any determination of tax on unaccounted goods must follow the show cause procedures for assessing tax liability. It finds that conditions for confiscation under Section 130 were not met and that penalties must be imposed in accordance with the statutory bifurcation in Section 122, with the offences in question attracting only the capped penalty, thereby underscoring procedural limits on enforcement powers.
    Case LawsIndian Laws
    Interim Orders and the Limits of Article 142: Safeguarding Natural Justice Balancing Judicial Powers...
    Show AI Summary
    Limits on Article 142: extraordinary power cannot automatically vacate interim stays; natural justice and supervisory jurisdiction must be preserved.
    Limits on the Supreme Court's extraordinary jurisdiction were defined to prevent blanket, time based vacation of interim stays; equitable power cannot deprive non parties of substantive benefits or negate the right to be heard. The Court confined vacation rules to cases where interim relief was granted without notice, instructed High Courts to grant limited ad interim relief, prioritise vacation applications, avoid routine time bound disposal directives, and recognised that past automatic vacations that led to concluded trials raise finality concerns while endorsing judicial superintendence and natural justice as constitutional constraints.
    Case LawsIBC
    Upholding Fairness and Transparency in Insolvency Resolution: A Landmark Judgment on the IBC
    Show AI Summary
    Insolvency plan compliance: failure to acknowledge creditor claims or secure approvals undermines approved resolution plans.
    The court held that a recall application grounded in lack of notice and alleged misrepresentation is maintainable under principles of natural justice. It found the resolution plan non-compliant with Section 30(2) read with Regulations 37 and 38-specifically for failing to acknowledge a creditor's claim, misrecording the payable amount, omitting secured creditor classification despite a charge, and proposing use of third-party statutory land without necessary approvals-deficiencies that materially affected the plan's transparency and treatment of creditor classes.
    Case LawsIndian Laws
    Supreme Court Clarifies Vicarious Liability of Directors in Cheque Dishonour Cases
    Show AI Summary
    Vicarious liability of directors clarified: specific averments required to link a director to company affairs before liability attaches.
    The Court held that vicarious liability of a director in cheque dishonour cases cannot be invoked by merely reproducing statutory language or alleging directorship; complaints must contain specific factual averments showing how the director was responsible for or in charge of the company's day to day affairs to link the director to issuance or dishonour of negotiable instruments.
    Case LawsIndian Laws
    Interim Compensation in Cheque Dishonor Cases: Discretion and Due Process, Scope of the word "May"
    Show AI Summary
    Interim compensation discretion: courts must prima facie assess claims and defences before ordering payment under Section 143A.
    The Court interpreted Section 143A(1) of the Negotiable Instruments Act as conferring a discretionary power to order interim compensation, holding that the word "may" cannot be read as mandatory. Courts must prima facie assess the complainant's case and the accused's defence; the presumption under section 139 alone does not suffice. Interim compensation may be directed only when a prima facie case is established, with the quantum determined after considering transaction nature, parties' relationship, and the accused's paying capacity, and brief reasons must be recorded.
    Case LawsIndian Laws
    Unraveling the Principles of Delay Condonation: A Comprehensive Analysis by the Supreme Court
    Show AI Summary
    Condonation of delay: courts require sufficient cause, balancing strict limitation rules with liberal remedial discretion.
    Principles of condonation of delay require balancing the Limitation Act's public policy against stale litigation: Section 3 is to be strictly interpreted while Section 5 is to be construed liberally to allow judicial discretion where sufficient cause is shown. Discretion remains limited by considerations such as inordinate delay, negligence, and lack of due diligence, and prior decisions granting condonation do not automatically justify relief unless the factual matrices are substantially similar.
    Case LawsIncome Tax
    Interpreting Section 80G Provisions: ITAT's Stance on Charitable Institution Registration
    Show AI Summary
    Registration under Section 80G: provisional approval permits subsequent final registration regardless of prior commencement of activities.
    The Tribunal held that institutions granted provisional approval under the First Proviso to Section 80G(5) are entitled to apply for final registration under the proviso's final-registration clause, and that the relevant date of commencement is to be counted from activities undertaken after grant of provisional registration; a prior commencement of activities before provisional grant cannot alone justify rejection of a final-approval application.
    Case LawsCustoms
    Monetary Limits for Filing Appeals: Analyzing the CESTAT Judgment on Binding Nature of CBIC Instruct...
    Show AI Summary
    Binding nature of departmental instructions vs natural justice: tribunals may prioritize procedural fairness over monetary thresholds.
    The CESTAT held that CBIC instructions bind departmental officers but do not bind courts and tribunals, which must safeguard natural justice. The Tribunal found the appellate order defective for failing to remit valuation reassessment to the proper officer as statutorily required, treated related Bills of Entry as a single transaction for monetary limit calculation, and invoked its procedural power to hear departmental appeals on merits despite the Board's monetary threshold.
    Case LawsIncome Tax
    Interpreting the Scope and Limits of Sections 153A and 153C: A Judicial Perspective
    Show AI Summary
    Search assessment provisions under Sections 153A and 153C override ordinary reassessment time limits; asset-threshold verification required.
    The judgment holds that search-triggered assessment provisions function as non-obstante clauses displacing ordinary reassessment time limits, distinguishes the enduring liability to tax from the temporal right to assess, prescribes that block periods are computed from the year of search (or date of receipt of seized records for non-searched persons), and treats the asset-represented income threshold as a mandatory, aggregable precondition requiring the assessing officer's recorded satisfaction.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Income Tax › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Income Tax

      Comparison of SCHEDULE II "INCOME NOT TO BE INCLUDED IN TOTAL INCOME" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      17 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      SCHEDULE II INCOME NOT TO BE INCLUDED IN TOTAL INCOME

      Income-tax Act, 2025

      At a Glance

      SCHEDULE II sets out classes of income that are excluded from "total income" for income-tax purposes. The Bill (Old Version) and the enacted Act differ in several material respects affecting life-insurance exclusions, pension/NPS entries, references to International Financial Services Centre (IFSC) entities, and the inclusion of equalisation-levy income. Affected parties include policyholders, insurers, employers, employees, pension subscribers, IFSC entities and tax authorities. Effective dates are stated within specific entries (for example, policy issue periods and 1 April 2002/2023) where provided; no single overarching commencement date for the Schedule is stated in the Bill text.

      Background & Scope

      Statutory hook: SCHEDULE II (See section 11) - "Income not to be included in total income." The Schedule lists categories of exempt income (column B) subject to conditions (column C). Definitions and notes at the end assign meanings to terms used in the table. The Bill (Old Version) is the source document for this commentary. Any differences vis-`a-vis the enacted Act are identified only insofar as both texts were provided; where a detail is absent in the Bill text, the phrase "Not stated in the document." has been used.

      Statutory Provision Mode

      Text & Scope

      The Schedule enumerates 16 heads of income excluded from total income, including: agricultural income; sums under life-insurance policies (with sub-conditions tied to period of issue, premium-to-sum-assured ratios and aggregate premium ceilings); provident fund and recognised provident fund payments (with carve-outs for interest on large contributions on/after 1 April 2021); payments under Sukanya Samriddhi, National Pension System (NPS) Trust, Agniveer Corpus Fund, approved superannuation funds; scholarships; awards/rewards instituted or approved by government; interest or other receipts on specified government securities and deposits; interest on gold bonds/certificates; interest on bonds issued by local authorities or State Pooled Finance Entities; income on transfer of certain UTI units; income chargeable to equalisation levy (new insertion); and specific categories u/s 10(15) and related provisions of the 1961 Act as applicable.

      Interpretation

      The text frames exclusions as conditional: each head is subject to prescribed conditions and definitions in accompanying notes. Legislative intent, as discernible from the Bill text, is to preserve traditional exemptions (agriculture, certain pensions, scholarships, specified government securities) while tightening or clarifying tax-exempt treatment for life-insurance receipts and retirement/savings vehicles by reference to issue dates, premium ratios, aggregate premium ceilings and contribution thresholds. The insertion of equalisation-levy related exclusion (Sl. No. 15) signals explicit recognition of overlap between equalisation-levy chargeability and income-tax neutrality for certain cross-border digital services.

      Exceptions/Provisos

      Key carve-outs and conditions provided in the Bill include:

      • Life-insurance sums excluded only if policies meet period-specific premium-to-sum-assured ratios and, for certain periods, aggregate premium ceilings (Rs. 2,50,000 or Rs. 5,00,000) - and certain sums (section 127 receipts; Keyman policies) are expressly ineligible.
      • Portions of interest on provident fund/recognised provident fund balances attributable to contributions on/after 1 April 2021 are not eligible for exclusion where contributions exceed specified thresholds (Rs.5,00,000 / Rs.2,50,000) and the amount not excluded is to be computed as prescribed.
      • NPS payments excluded only to the extent they do not exceed 60% of the total amount payable on closure/opt-out.
      • Approved superannuation fund payments are exempt only in specified circumstances (death, commutation at retirement/age, refund in limited cases, transfer to specified pension schemes).
      • Equalisation-levy related incomes are excluded only where not chargeable as royalty/FTS in India under agreements notified u/s 159 (explicit exception in Sl. No. 15).

      Illustrations

      • Example 1: A unit-linked life policy issued on 1 Oct 2023 with annual premium such that premium-to-sum-assured ratio is 12% and aggregate premium per tax year is Rs.2,00,000 - the Bill permits exclusion if it meets the Item 2 conditions (unit-linked post-1-April-2023: ratio <=15% for special, <=10% for others; aggregate <=Rs.2,50,000 for ULIP). Whether treated as "special policy" depends on disability/disease status u/rs - Not stated in the document.
      • Example 2: An employee receives accumulated recognised provident fund balance including interest attributable to contributions of Rs.6,00,000 made on/after 1 April 2021 in a year when no employer contribution was made - interest attributable to that contribution is not eligible for exclusion (threshold exceeded Rs.5,00,000); the portion not excluded to be computed as prescribed (procedure Not stated in the document).

      Interplay

      The Bill references other statutory instruments and provisions: Section 11 (hook), Section 127 (for life-insurance ineligibility), Schedule XI para 8, Schedule XV (definition of "actual capital sum assured"), Insurance Regulatory regulations, the Provident Funds Act, Government Savings Promotion Act (Sukanya Samriddhi), Dept. notifications regarding NPS (notifications not reproduced in the Bill text), Finance Act, 2016 (equalisation levy Chapter VIII) and section 159 agreements. The Bill contemplates Board guidelines for removal of difficulties. Where computation methods are required ("as prescribed"), the Bill defers to rules/regulations; these procedural details are Not stated in the document.

      Differences between the Bill (Old Version) and the Enacted Act - Practical Impact

      TopicBill (Old Version)Act (2025) - Differences & Practical Impact
      Reference to IFSC in life-insurance entryExclusion clause expressly excludes policies issued by "International Financial Services Centre insurance intermediary office" from the general test; IFSC office language appears within clause (a).

      The Act broadens IFSC coverage differently (references to "International Financial Services Centre Insurance Office") and later adds a special carve-out that aggregate premium conditions do not apply to policies issued on or after 1 April 2025 by the IFSC Insurance Office.

      Practical impact: IFSC-issued policies post-1-Apr-2025 enjoy relaxed aggregate-premium limits under the Act versus the Bill - this benefits IFSC policyholders and insurers.

      Section reference for ineligible insurance sumsIneligibility lists section 127 (no subsection reference) and Keyman policies.

      The Act specifies "section 127(4)" as ineligible; this narrows or clarifies which portion of section 127 is meant.

      Practical impact: narrower/clearer exclusion scope for section 127 receipts, reducing interpretive ambiguity.

      Aggregate premium thresholds for policies issued on/after 1-Apr-2023ULIPs: aggregate <=Rs.2,50,000; other policies: aggregate <=Rs.5,00,000.

      The Act restates these ceilings but then adds the IFSC carve-out for policies issued on/after 1-Apr-2025.

      Practical impact: domestic policyholders unchanged, IFSC policyholders gain advantage.

      NPS-related entries (Sl. Nos. 15 & 16)The Bill lacks specific entries for "lump sum amount" defined by a particular notification and for Unified Pension Scheme subscriber-specific references.

      The Act adds two discrete entries (Sl. Nos. 15 and 16) dealing with NPS payments to Unified Pension Scheme subscribers and "lump sum amount" per a departmental notification dated 24 Jan 2025.

      Practical impact: greater specificity and targeted exemption for Unified Pension Scheme subscribers under NPS, linking to a concrete notification (FX-1/3/2024-PR). This reduces uncertainty for affected NPS subscribers.

      Equalisation levy incomeBill includes Sl. No. 15 addressing income chargeable to equalisation levy.

      The Act omits the Bill's Sl. No. 15 equalisation-levy entry or shifts numbering; comparison shows the Act instead includes other NPS-related items.

      Practical impact: the treatment of equalisation-levy incomes requires reconciliation between Act text and prior Bill; taxpayers relying on the Bill's exclusion must verify the final Act wording (Not stated in the document).

      Practical Implications

      • Compliance and risk areas: Life-insurance exclusions carry detailed temporal and quantitative conditions (period of issue, premium-to-sum-assured ratio, aggregate premium ceilings). Insurers and policyholders must verify issue date classifications and compute premium ratios and aggregate premiums across the policy term. The explicit ineligibility for keyman policies and section 127 receipts increases scrutiny over policy ownership and assignment.
      • NPS and provident fund entries impose record-keeping obligations: authorities and subscribers must track contributions made on or after 1 April 2021 separately, and identify portions of interest attributable to contributions exceeding thresholds. The method of computing the amount not excluded is left to prescribed rules - until rules are notified, potential uncertainty persists.
      • Equalisation-levy clause (Sl. No. 15): taxpayers and digital service providers should reconcile equalisation-levy exposure and Income-tax chargeability; the clause excludes income chargeable to equalisation levy except where the income is otherwise taxable in India as royalty/FTS under notified agreements (thus creating an interplay with tax treaty determinations and notifications u/s 159).
      • IFSC references: the Bill treats certain IFSC insurance intermediary office receipts differently in the life-insurance entry (exclusion/inclusion language differs versus the Act). Parties operating within IFSCs should note the special treatment and any administrative guidance forthcoming.
      • Procedural uncertainty: multiple entries defer to "as prescribed" computations and to notifications by the Central Government; until those are issued, taxpayers face interpretation and compliance risk. The Board's power to issue binding guidelines (with Central Government approval) is preserved, indicating administrative rule-making will shape practical application.

      Key Takeaways

      • The Bill retains traditional exemptions (agriculture, scholarships, certain pension/retirement receipts) while imposing quantified tests on insurance exclusions (period-specific ratios and aggregate premium ceilings).
      • Interest on provident fund balances attributable to large post-1-April-2021 contributions is explicitly excluded from exemption, with thresholds (Rs.5,00,000 / Rs.2,50,000) and prescribed computation methods.
      • Equalisation-levy related income is newly addressed - excluded except where taxable in India as royalty/FTS under notified agreements.
      • Certain specific sums are expressly excluded from insurance exemption (section 127 receipts; Keyman insurance), tightening the prior broader language.
      • Several entries defer key operational questions to rules/notifications; substantial administrative guidance is required to operationalise the Schedule.

      Full Text:

      SCHEDULE II INCOME NOT TO BE INCLUDED IN TOTAL INCOME

      Topics

      ActsIncome Tax
      Next ➔