Computation of income chargeable to tax under section 92(2)(l)

Computation of income chargeable to tax under section 92(2)(l)

59. (1) For the purposes of section 92(2)(l), if a person receives any sum, including the amount allocated by way of bonus, during a tax year under a life insurance policy, then the income chargeable to tax under the said section shall be computed in the following manner :—

(i) where the sum is received for the first time under the life insurance policy during the tax year (herein referred to as first tax year), the income chargeable to tax in the first tax year shall be computed in accordance with the formula —

A–B

Where, —

A = the sum or aggregate of sum received under the life insurance policy during the first tax year; and

B = the aggregate of the premium paid during the term of the life insurance policy till the date of receipt of the sum in the first tax year that has not been claimed as deduction under any other provision of the Act; and

(ii) where the sum is received under the life insurance policy during the tax year subsequent to the first tax year (hereinafter referred to as subsequent tax year), the income chargeable to tax in the subsequent tax year shall be computed in accordance with the formula, —

C–D

Where, —

C = the sum or aggregate of sum received under the life insurance policy during the subsequent tax year; and

D = the aggregate of the premium paid during the term of the life insurance policy till the date of receipt of the sum in the subsequent tax year not being premium which—

(a) has been claimed as deduction under any other provision of the Act; or

(b) is included in amount 'B' or amount 'D' of this sub-rule in any of the year or years preceding the tax year.

(2) For the purposes of this rule, the sum received under a life insurance policy shall mean any amount, by whatever name called, received under such policy that is not excluded from the total income of the tax year in accordance with the provisions of Schedule II [Table: Sl. No. 2], other than the sum—

(a) received under a unit linked insurance policy; or

(b) being the income referred to in section 92(2)(d).