New Delhi: The Central Board of Direct Taxes (CBDT) on Wednesday issued a set of detailed tips on the withdrawal of tax advantages on fats insurance coverage insurance policies which was introduced on this 12 months’s union finances.
The detailed 17-page tips posted on the tax authority’s web site defined the modifications launched within the Revenue Tax Act this 12 months with conditions and examples. The rules are issued to take away difficulties in giving impact to the provisions launched this 12 months.
Revenue Tax Act exempts any earnings obtained from an insurance coverage coverage together with the bonus quantity from tax. This 12 months, this provision was modified to exclude insurance coverage insurance policies by which annual premium in any of the earlier years was greater than ₹500,000. This was made as a way to be sure that tax advantages meant for odd individuals will not be cornered by the tremendous wealthy.
“This provision was launched to nullify the tax benefit given to investments disguised as insurance coverage insurance policies,” defined Amit Maheshwari, Tax Associate at AKM International, a tax and consulting agency.
“Since this provision would impression many people, particularly the wealthy, CBDT has issued tips to take away difficulties, which is a welcome transfer. The rules are elaborate and provides varied examples on the computation of consideration eligible for exemption,” stated Maheshwari.
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Up to date: 17 Aug 2023, 09:31 AM IST
