Loading...

⚠ ✕
❮ Top
☎ Help
☰
GST ▸
Central GST ▸
Integrated GST + ▸
UTGST / SGST ▸
GST Case Laws + ▸
Income Tax ▸
Income Tax ▸
Allied (Direct Tax) ▸
Income Tax Case Laws ▸
DTAA ▸
International Taxation ▸
Customs ▸
Customs Act / Rules ▸
Notifications / Forms ▸
Circulars / Tariff ▸
Case Laws / Manual ▸
FTP/SEZ ▸
Foreign Trade ▸
Notifications / Circulars / Appendix / Forms ▸
Special Economic Zone (SEZ) ▸
Corp. Law ▸
Company Laws ▸
Standards / Trusts ▸
Partnership / LLP / Societies ▸
Case Laws ▸
FEMA ▸
FEMA / FCRA ▸
Notifications / Circulars ▸
Manual / FAQ ▸
FEMA Case Laws ▸
SEBI / IBC ▸
SEBI ▸
SEBI Case Laws ▸
IBC ▸
IBC - Case Laws ▸
PMLA ▸
Benami Property ▸
Black Money ▸
Money Laundering ▸
Vivad ▸
Direct Tax ▸
Indirect Taxes ▸
Indian Laws ▸
Indian Laws ▸
Bharatiya Nyaya 2023 ▸
Finance Acts & Bills / Amendment Acts ▸
Case Laws ▸
Labour Laws ▸
Labour Code ▸
Old / Others ▸
Central Excise ▸
Central Excise - Cases ▸
Wealth Tax ▸
Service Tax ▸
Service Tax Cases ▸
CST / DVAT ▸
CST / VAT / Sales Tax ▸
×

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 characters 0/2000
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 ✕
🔎 Filters / Advanced Search ❯
TEXT

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.
Relevance Default Date
    Manuals Income Tax
    Whether Shares acquired as Gift from someone, are eligible for exemption u/s 10(38) at the time of s...
    Manuals Income Tax
    Whether an enhanced compensation by any court or other authority shall be included u/s 10(37)?
    Manuals Income Tax
    Whether the income on transfer of units is also exempt u/s 10(35)?
    Manuals Income Tax
    Whether the exemption u/s 10(34A) on income arising due to buyback of shares applies on Long Term Ca...
    Manuals Income Tax
    What are the cases where any sum received for life insurance policy u/s 10(10D) shall be exempt.
    Manuals Income Tax
    What type of incomes shall be exempted u/s 10(8)?
    Manuals Income Tax
    What are the conditions specified u/s 10(23A) for claiming exemption on Income of some Professional ...
    Manuals Income Tax
    What are the conditions as specified u/s 10(21) to avail exemption of any income of a research assoc...
    Manuals Income Tax
    As per section 10(19A), if the annual value of any one palace in the occupation of a former ruler, i...
    Manuals Income Tax
    Whether any amount received as family pension by any member of the family of an individual who has b...
    Manuals Income Tax
    A partner of the firm/LLP receives interest on capital and remuneration from the firm/LLP. Whether s...
    Manuals Income Tax
    Whether an amount received by an Individual (a co-parcener to the HUF) from this HUF would be taxabl...
    Manuals Income Tax
    Change in accounting policy - When is to be changed - What should be the basis for change in account...
    Manuals Income Tax
    Accrual of income - Scope of ICDS - If there is conflict between Section 5 and Section 145, which wo...
    Manuals Income Tax
    ICDS - Accrual basis of Accounting - Accrual of income versus Receipt of income
    Manuals Income Tax
    Bad debts out of income recognised on the basis of ICDS but not yet recognised in books of account
    Manuals Income Tax
    Applicability of ICDS for the purpose of disallowance u/s 40(a)(i) and 40(a)(ia)
    Manuals Income Tax
    Applicability of ICDS on TDS
    Manuals Income Tax
    Maintenance of Books of accounts for the purpose of ICDS
    Case Laws Income Tax
    Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassm...
❮
❯
❯❯
Maximize Maximize Maximize
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
All › Income Tax
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Manuals Income Tax
Whether Shares acquired as Gift from someone, are eligible for exemption u/s 10(38) at the time of s...
Show AI Summary
Exemption under Section 10(38) applies to gifted shares on sale if the prior owner did not acquire them in a disqualifying manner.
Shares received as a gift are eligible for exemption under Section 10(38) on sale, provided the previous owner did not acquire the shares in a manner or under conditions that disqualify them from the exemption.
Manuals Income Tax
Whether an enhanced compensation by any court or other authority shall be included u/s 10(37)?
Show AI Summary
Exemption for enhanced compensation confirms enhanced compensation falls within exempted compensation under income tax law.
Enhanced compensation is treated as part of "compensation" for the purposes of the exemption under 10(37); amounts characterized as enhanced compensation are encompassed by the exemption framework and are not taxable under that provision, as stated in the income tax manual guidance on exempted income.
Manuals Income Tax
Whether the income on transfer of units is also exempt u/s 10(35)?
Show AI Summary
Income on transfer of units is not exempt under section 10(35); such transfer income remains taxable.
Income arising on the transfer of units is not covered by the exemption under 10(35); proceeds from disposal of units are not exempt under that clause and must be treated as taxable transfer income under ordinary tax provisions.
Manuals Income Tax
Whether the exemption u/s 10(34A) on income arising due to buyback of shares applies on Long Term Ca...
Show AI Summary
Exemption on buyback income applies irrespective of short term or long term capital gains for shareholders under income tax law.
The exemption on buyback income applies to a shareholder's receipt irrespective of the holding period; buyback proceeds are exempt from income tax in the shareholder's hands whether classified as short term or long term capital gains.
Manuals Income Tax
What are the cases where any sum received for life insurance policy u/s 10(10D) shall be exempt.
Show AI Summary
Life insurance exemption under section 10(10D) lists categories where policy receipts are fully tax-exempt from income tax.
Exemption under Section 10(10D) covers amounts received on life insurance policies in defined categories: proceeds on insurance of a dependent handicapped person, proceeds under key man policies, and proceeds where annual premiums exceed specified proportions of the actual capital sum assured for policies issued in particular periods; proceeds under the premium ratio exceptions are stated to be fully exempt if received on the death of the person.
Manuals Income Tax
What type of incomes shall be exempted u/s 10(8)?
Show AI Summary
Income exemption under Section 10(8): foreign government remuneration for duties in India and foreign-sourced taxable income.
Exemption under Section 10(8) covers two categories where agreements provide relief: remuneration paid by the foreign State for duties performed in India, and any other income arising outside India that the individual is required to tax as income or social security tax in that foreign State.
Manuals Income Tax
What are the conditions specified u/s 10(23A) for claiming exemption on Income of some Professional ...
Show AI Summary
Exemption for professional institutions under section 10(23A) requires Central Government approval and exclusive application of income to objects.
Exemption under section 10(23A) requires that an institution apply its income, or accumulate it for application, solely to the objects for which it is established, and that the institution be approved by the Central Government; both conditions are cumulative for claiming the exemption.
Manuals Income Tax
What are the conditions as specified u/s 10(21) to avail exemption of any income of a research assoc...
Show AI Summary
Exemption for research association income requires exclusive application to objects and permitted investments with corpus exceptions.
Exemption requires that the research association apply its income, or accumulate it, wholly and exclusively to its objects, and that funds not be invested or deposited during the previous year except in forms permitted for trusts; exceptions to the investment restriction include assets forming part of the corpus, accretions to shares forming the corpus, and voluntary contributions maintained in kind such as jewellery or furniture.
Manuals Income Tax
As per section 10(19A), if the annual value of any one palace in the occupation of a former ruler, i...
Show AI Summary
Letting of former ruler's palace results in taxable income under section 10(19A), not eligible for exemption.
If any palace or portion occupied by a former ruler is let out, the rent or annual value of that let-out portion is not exempt and is taxable rather than eligible for the exemption applicable to former rulers.
Manuals Income Tax
Whether any amount received as family pension by any member of the family of an individual who has b...
Show AI Summary
Family pension exemption shields dependents of government servants or decorated servicemen from taxable income under income tax law.
Any amount received as family pension by members of the family of an individual who has been in Government service or has been awarded the Vir Chakra is fully exempted under the relevant income tax provision, and therefore excluded from the recipient's taxable income as an assessee-specific exemption.
Manuals Income Tax
A partner of the firm/LLP receives interest on capital and remuneration from the firm/LLP. Whether s...
Show AI Summary
Share of profit exemption: interest on capital and partner remuneration are not covered under the provision.
The exemption is confined to a partner's share of profit from the firm or LLP and does not extend to interest on capital or to remuneration paid to the partner; such receipts must therefore be treated separately from the profit-share exemption.
Manuals Income Tax
Whether an amount received by an Individual (a co-parcener to the HUF) from this HUF would be taxabl...
Show AI Summary
Exemption for HUF distributions may not apply where clubbing rules apply, affecting taxability of co parcener receipts.
Amounts received by an individual co parcener from the HUF are exempt in the hands of the assessee under the general exemption for such receipts, subject to the overriding provision dealing with clubbing or attribution of income which can limit that exemption.
Manuals Income Tax
Change in accounting policy - When is to be changed - What should be the basis for change in account...
Show AI Summary
Accounting policy change requires reasonable cause and substance-over-form treatment to reflect a true and fair view.
Accounting policies must present a true and fair view of the state of affairs and income; treatment and presentation must follow substance over legal form; an accounting policy shall not be changed without reasonable cause, and any change must serve faithful representation for income computation and disclosure.
Manuals Income Tax
Accrual of income - Scope of ICDS - If there is conflict between Section 5 and Section 145, which wo...
Show AI Summary
Accrual versus accounting method: accrual-based charge under residency provisions overrides cash-basis bookkeeping for taxing income.
Where income has become taxable under the substantive provision governing non-resident receipts, that charging provision prevails over a taxpayer's cash-basis accounting; Section 145 is a machinery provision to effectuate the charge and cannot be used to defeat or nullify the substantive charge so as to allow taxable income to escape tax.
Manuals Income Tax
ICDS - Accrual basis of Accounting - Accrual of income versus Receipt of income
Show AI Summary
Accrual of income: recognition occurs when a vested right and debtor liability arise, not necessarily on actual receipt.
ICDS I explains that accrual of income arises when a vested right to receive payment emerges and a corresponding liability is created on the other party; postponement or non-receipt does not prevent accrual, though non-receipt may justify separate deductions or claims. Accrual and arisal denote an inchoate right prior to actual receipt, while receipt denotes physical collection, and for tax accounting the existence of the right and the debtor's liability are the operative tests for accrual-based recognition.
Manuals Income Tax
Bad debts out of income recognised on the basis of ICDS but not yet recognised in books of account
Show AI Summary
Deduction for bad debts allowed where income recognised under ICDS but not recorded in accounts is later irrecoverable.
Where a debt included in income on the basis of Income Computation and Disclosure Standards but not recorded in the accounts becomes irrecoverable, Finance Act, 2016 permits the debt (or part) to be allowed as a deduction in the year it becomes irrecoverable and deems that the debt has been written off in the accounts for the purposes of the deduction.
Manuals Income Tax
Applicability of ICDS for the purpose of disallowance u/s 40(a)(i) and 40(a)(ia)
Show AI Summary
Applicability of ICDS: timing of TDS entries determines whether expenditure is disallowable under TDS disallowance provisions.
ICDS apply only to computation of income under Profit & gains from business or profession and Income from Other Sources. For Sections 40(a)(i) and 40(a)(ia), disallowance depends on whether tax was deductible and whether an entry creating that liability or deduction existed in the year expenditure was claimed; absence of such an entry negates disallowance, while prior-year deduction of tax prevents disallowance in the year of allowance.
Manuals Income Tax
Applicability of ICDS on TDS
Show AI Summary
ICDS exclusion from TDS timing: TDS deduction timing and taxable expenditure follow book credit or payment date.
ICDS does not affect TDS mechanics: the time for TDS (date of credit in books or date of payment) and the expenditure amount subject to deduction are determined by the books of account or payment date, not by ICDS computation of allowable expenditure.
Manuals Income Tax
Maintenance of Books of accounts for the purpose of ICDS
Show AI Summary
ICDS compliance: prepare ICDS-based financials and reconciliations to ensure taxable income computation aligns with disclosure standards.
Differences between accounting under ICDS and other accounting frameworks can materially affect taxable income and subsequent years' computations; taxpayers should quantify divergences and account for consequential tax adjustments. Practically, maintain parallel ICDS-based profit and loss and balance sheet statements and prepare a detailed reconciliation with primary accounting records to ensure all ICDS adjustments are considered. Auditors must certify that computation of total income complies with ICDS, making transparent documentation of adjustments and reconciliations necessary for audit certification and tax compliance.
Case Laws Income Tax
Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassm...
Show AI Summary
Capital gain valuation under section 50C on transfer of contractual rights challenged as inappropriate and commercially onerous.
Application of section 50C to a transfer of rights under a power of attorney, where no possession or control of the immovable property passed and no stamp authority value was adopted, was contested; the assessing officer's adoption of an enhanced valuation for computing short term capital gains was regarded as inappropriate and characterised as harassment, and that addition was reversed on appeal.

TMI Notes

All › Income Tax
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

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

Topic Bill (Old Version) Act (2025) - Differences & Practical Impact
Reference to IFSC in life-insurance entry Exclusion 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 sums Ineligibility 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-2023 ULIPs: 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 income Bill 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

Acts Income Tax
Next ➔