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**Report on Income Tax 2nd Amendment Rules, 2022**
**1. Executive Summary:**
This report analyzes the Income Tax 2nd Amendment Rules, 2022, which amends the Income Tax Rules, 1962. The core purpose of this amendment is to introduce a specific formula for calculating capital gains arising from specified unit linked insurance policies (ULIPs) under subsection 1B of section 45 of the Income-tax Act, 1961. This report details the changes, affected parties, and expected impact based solely on the provided text.
**2. Introduction:**
This report aims to provide a comprehensive overview of the Income Tax 2nd Amendment Rules, 2022, based on the official notification. The analysis focuses on understanding the amendment's objectives, key provisions, and potential implications for relevant stakeholders, based *only* on the information presented in the provided policy text.
**3. Policy Overview:**
* This is an amendment to the Income Tax Rules, 1962.
* **Core Objective:** The core objective of this amendment is to provide a specific method for calculating capital gains arising from specified unit linked insurance policies (ULIPs) as per subsection 1B of section 45 of the Income-tax Act, 1961.
**4. Background and Rationale:**
This amendment likely addresses the need for a clear and specific methodology for calculating capital gains on ULIPs. Without such a defined method, ambiguity could arise in the taxation of these financial instruments. This amendment aims to reduce ambiguity and standardize the capital gains calculation for specified ULIPs.
**5. Key Provisions / Changes:**
This amendment *introduces* a new rule, "8AD Computation of capital gains for the purposes of subsection 1B of section 451" to the Income Tax Rules, 1962. The key change is the introduction of a specific formula for calculating capital gains from specified unit linked insurance policies (ULIPs):
* **What is being changed:** The amendment adds rule 8AD to the existing Income Tax Rules, 1962.
* **New Rule/Provision:** Rule 8AD provides a formula for calculating capital gains when a person receives an amount under a specified unit linked insurance policy. There are two distinct formulas, one for the *first time* an amount is received and one for *subsequent* receipts.
* **First Time Receipt:** Capital Gains = A - B, where A is the amount received for the first time (including bonus) and B is the aggregate of the premium paid until the date of receipt.
* **Subsequent Receipts:** Capital Gains = C - D, where C is the amount received after the first receipt (including bonus, excluding amounts already considered for calculation) and D is the aggregate premium paid until the date of receipt (reduced by the premium already considered for calculation).
* **Difference/Effect:** The introduction of this rule provides a concrete, formula-based approach where previously the calculation was not explicitly defined in the rules. It standardizes the method for computing capital gains, which likely leads to more consistent tax treatment of ULIPs. The capital gains are deemed to arise from the transfer of a unit of an equity oriented fund set up under a scheme of an insurance company comprising unit linked insurance policies.
**6. Target Audience and Stakeholders:**
The target audience and stakeholders directly affected by this amendment are:
* Individuals who have invested in specified unit linked insurance policies (ULIPs).
* Insurance companies offering specified ULIPs.
* Tax professionals and advisors who assist individuals and companies with tax planning and compliance.
* The Central Board of Direct Taxes (CBDT) and other tax authorities responsible for implementing and enforcing income tax regulations.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance is responsible for implementing these rules.
* **Timelines/Procedures:** The rules come into effect from the date of their publication in the Official Gazette (January 18, 2022). The procedures for calculating capital gains are explicitly defined in the formulas provided in Rule 8AD.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcome of these changes is to:
* Provide clarity and certainty regarding the calculation of capital gains on specified ULIPs.
* Standardize the method for computing capital gains, leading to more consistent tax treatment.
* Reduce the potential for disputes or litigation related to the taxation of ULIPs.
* Streamline the tax compliance process for individuals and insurance companies.
**9. Conclusion:**
The Income Tax 2nd Amendment Rules, 2022, introduce a significant change by providing a specific formula for calculating capital gains from specified ULIPs. This amendment is likely to have a positive impact by bringing clarity, standardization, and consistency to the taxation of these financial instruments. It clarifies the method for calculating taxes of earnings from these policies, which is valuable to investors and tax collectors alike.
Key Entities Referenced
INDIA: Country
NEW DELHI: Capital of India, place of notification
TUESDAY, JANUARY 18, 2022: Date of the notification
PAUSHA 28, 1943: Date in the Indian national calendar
MINISTRY OF FINANCE: The ministry issuing the notification
Department of Revenue: Department within the Ministry of Finance
CENTRAL BOARD OF DIRECT TAXES: Authority issuing the notification
NOTIFICATION: Type of document
Incometax Act, 1961: Act being amended
43 of 1961: Reference number of the Incometax Act, 1961
Incometax Rules,1962: Rules being amended
Income tax 2nd Amendment Rules, 2022: Name of the amendment rules
Official Gazette: The official publication for the notification
G.S.R. 24E: Notification number
section 45: Section of the Incometax Act, 1961
section 295: Section of the Incometax Act, 1961
rule 8AC: Rule in the Incometax Rules, 1962
rule 8AD: New rule being inserted into the Incometax Rules, 1962 regarding computation of capital gains for unit linked insurance policies
specified unit linked insurance policy: A type of insurance policy defined in the context of capital gains computation
equity oriented fund: Type of fund related to unit linked insurance policies
section 2: Section of the Incometax Act, 1961
clause 14: Clause within section 2 of the Incometax Act, 1961
subclause c: Subclause within clause 14 of section 2 of the Incometax Act, 1961
No. 82022F. No. 370142612021TPL: Notification number
NEHA SAHAY: Under Secretary
Gazette of India: Official government gazette
S.O. 969E: Notification number of the principal rules
26th March, 1962: Date of the notification of the principal rules
G.S.R. 15E: Notification number of the last amendment
14th January, 2022: Date of the last amendment
Government of India Press, Ring Road, Mayapuri, New Delhi110064: Location of the printing press
Controller of Publications, Delhi110054: Publisher of the Gazette of India
रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
xxxGIDHxxx
सी.जी.-डी.एxलxx.-GअID.E-1x8xx0 12022-232717
CG-DL-E-18012022-232717
असाधारण
EXTRAORDINARY
भाग II—खण्ड 3—उप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 24] नई ददल्ली, मगं लिार, जनिरी 18, 2022/पौर् 28, 1943
No. 24] NEW DELHI, TUESDAY, JANUARY 18, 2022/PAUSHA 28, 1943
जित्त मत्रं ालय
(राजस्ट्ि जिभाग)
(केन्द्रीय प्रत्यक्ष कर बोडड)
अजधसचू ना
नई ददल्ली, 18 जनिरी, 2022
सा.का.जन. 24(अ).—केंरीय प्रत्यक्ष कर बोड,ड आय-कर अजधजनयम, 1961 (1961 का 43) की धारा 295 के साथ
पठित धारा 45 की उपधारा (1 ख) द्वारा प्रदत्त िजियों का प्रयोग करत े हुए, आयकर जनयम, 1962 का और संिोधन करन े
के जलए जनम्नजलजखत जनयम बनाता ह,ै अथाडत:् ─
1. सजं क्षप्त नाम और प्रारंभ.—(1) इन जनयमों का संजक्षप्त नाम आयकर (दसू रा संिोधन) जनयम, 2022 ह।ै
(2) ये राजपत्र में उनके प्रकािन की तारीख से प्रिृत्त होंगे।
2. आयकर जनयम, 1962 म ेंजनयम 8कग के पश्चात, जनम्नजलजखत जनयम अंत:स्ट् थाजपत दकया जाएगा, अथातड ्:-
"8कघ धारा 45 की उपधारा (1ख) के प्रयोजनों के जलए पजूं ीगत अजभलाभ की सगं णना–(1) जहां कोई व्यजि दकसी पूि ड िर् ड
के दौरान दकसी समय जिजनर्ददष्ट यूजनट बीमा पॉजलसी के अधीन कोई रकम प्राप्त करता ह,ै जजसमें ऐसी पॉजलसी पर बोनस
के माध्यम से आबंठटत रकम सम्मजलत ह,ै तब, -
(i) जहां पूि ड िर् ड के दौरान जिजनर्ददष्ट यूजनट बीमा पॉजलसी के अधीन पहली बार रकम प्राप्त होती ह,ै ऐसे व्यजि
द्वारा पूिड िर्ड के दौरान ऐसी रकम की प्राजप्त से उद्भूत होन े िाले पूंजीगत अजभलाभ की संगणना सूत्र के अनुसार
की जाएगी:-
379 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
क-ख
जहां, -
क = पूि ड िर्ड के दौरान जिजनर्ददष्ट यूजनट बीमा पॉजलसी के अधीन पहली बार प्राप्त रकम, जजसमें ऐसी पॉजलसी
पर बोनस के माध्यम स ेआबंठटत रकम सजम्मजलत ह;ै तथा
ख = जिजनर्ददष्ट यूजनट बीमा पॉजलसी की अिजध के दौरान 'क' में यथाजनर्ददष्ट रकम की प्राजप्त की तारीख तक
संदत्त दकए गए प्रीजमयम का योग;
(ii) जहां पूिड िर्ड के दौरान जिजनर्ददष्ट यूजनट बीमा पॉजलसी के अधीन रकम प्राप्त होती ह,ै दकसी भी समय खंड (i)
में यथाजनर्ददष्ट रकम की प्राजप्त के पश्चात,् ऐसे व्यजि द्वारा ऐसी रकम की प्राजप्त से उद्भूत पूंजीगत अजभलाभ पूि ड
िर्ड के दौरान जजसमें ऐसी रकम प्राप्त हुई ह,ै सूत्र के अनुसार सगं णना की जाएगी, -
ग-घ
जहां, -
ग = पूि ड िर् ड के दौरान एक जिजनर्ददष्ट यूजनट बीमा पॉजलसी के अधीन प्राप्त रकम, खंड (i) में यथाजनर्ददष्ट रकम
की प्राजप्त के पश्चात् दकसी समय, जजसमें ऐसी पॉजलसी पर बोनस के माध्यम से आबंठटत रकम सजम्मजलत है,
उस रकम को छोड़कर पूिडतम पूिड िर्ड या िर्ों के दौरान इस उप-जनयम के अधीन कराधेय रकम की संगणना
के जलए पहल े ही जिचार दकया गया ह;ै तथा
घ = जिजनर्ददष्ट यूजनट बीमा पॉजलसी की अिजध के दौरान संदत्त दकए गए प्रीजमयम का कुल योग, जैसा दक 'ग'
में यथाजनर्ददष्ट रकम की प्राजप्त की तारीख तक प्रीजमयम स े घटाया गया ह ै जजसे पूिडतम पूि ड िर्ड या िर्ों के
दौरान इस उपजनयम के अधीन कराधेय रकम की संगणना के जलए पहल ेही जिचार दकया गया ह।ै
(2) उप-जनयम (1) के खंड (i) या खंड (ii) के अधीन संगणना के अनुसार पूंजीगत अजभलाभ को एक योजना के अधीन
स्ट्थाजपत साधारण िेयरोन्द्मुख जनजध की एक इकाई के अंतरण से उद्भूत होने िाले यूजनट बीमा पॉजलसी िाली एक बीमा
कंपनी का पूंजीगत अजभलाभ समझा जाएगा।
स्ट्पष्टीकरण: इस जनयम के प्रयोजनों के जलए, "जिजनर्ददष्ट यूजनट बीमा पॉजलसी" अजभव्यजि का अथ ड दकसी यूजनट बीमा
पॉजलसी अजधजनयम की धारा 2 के खंड (14) के उप-खंड (ग) म ेंयथाजनर्ददष्ट ह ै ।"।
[अजधसूचना सं. 8/2022/फा. सं. 370142/61/2021-टीपीएल]
नेहा सहाय, अिर सजचि
ठटप्पण : मलू जनयम भारत के राजपत्र, असाधारण, भाग II, खंड-3, उप-खंड (ii) में अजधसचू ना संखयांक का.आ. 969 (अ)
तारीख 26 माच,ड 1962 म ें प्रकाजित दकए गए थ े और अजधसूचना संखयांक सा.का.जन.15(अ)- तारीख
14 जनिरी, 2022 द्वारा अंजतम बार संिोजधत दकए गए थे।
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 18th January, 2022
G.S.R. 24(E).—In exercise of the powers conferred by sub-section (1B) of section 45, read
with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby
makes the following rules further to amend the Income-tax Rules,1962, namely:─
1. Short title and commencement.—(1) These rules may be called the Income tax (2nd
Amendment) Rules, 2022.
(2) They shall come into force from the date of their publication in the Official Gazette.[भाग II—खण् ड 3(i)] भारत का राजपत्र : असाधारण 3
2. In the Income-tax Rules, 1962, after rule 8AC, the following rule shall be inserted, namely:—“8AD
Computation of capital gains for the purposes of sub-section (1B) of section 45-(1) Where any person
receives at any time during any previous year any amount under a specified unit linked insurance
policy, including the amount allocated by way of bonus on such policy, then, —
(i) where the amount is received for the first time under the specified unit linked insurance policy
during the previous year, the capital gains arising from receipt of such amount by such person
during the previous year in which such amount is received shall be calculated in accordance with
the formula:−
A-B
where, -
A= the amount received for the first time under a specified unit linked insurance policy during
the previous year, including the amount allocated by way of bonus on such policy; and
B = the aggregate of the premium paid during the term of the specified unit linked insurance
policy till the date of receipt of the amount as referred to in „A‟;
(ii) where the amount is received under the specified unit linked insurance policy during the
previous year, at any time after the receipt of the amount as referred to in clause (i), the capital
gains arising from receipt of such amount by such person during the previous year in which such
amount is received shall be calculated in accordance to the formula,—
C-D
where, -
C= the amount received under a specified unit linked insurance policy during the previous
year, at any time after the receipt of the amount as referred to in clause (i), including the
amount allocated by way of bonus on such policy excluding the amount that has already been
considered for calculation of taxable amount under this sub- rule during the earlier previous
year or years; and
D = the aggregate of the premium paid during the term of the specified unit linked insurance
policy till the date of receipt of the amount as referred to in „C‟ as reduced by the premium
that has already been considered for calculation of taxable amount under this sub-rule during
the earlier previous year or years.
(2) The capital gains as computed under clause (i) or clause (ii) of sub-rule (1) shall be deemed to be
the capital gains arising from the transfer of a unit of an equity oriented fund set up under a scheme of
an insurance company comprising unit linked insurance policies.
Explanation: For the purposes of this rule, the expression “specified unit linked insurance policy”
shall mean any unit linked insurance policy referred to in sub-clause (c) of clause (14) of section 2 of
the Act.”.
[Notification No. 8/2022/F. No. 370142/61/2021-TPL]
NEHA SAHAY, Under Secy.
Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-
section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and was last amended
vide notification number G.S.R. 15(E), dated 14th January, 2022
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.