Budget 2024: Amendment to Curb Misuse of Life Insurance Expense Deductions

The Budget 2024 proposes an amendment to curb the misuse of life insurance expense deductions. Currently, Section 44 of the Act and Rule 2 of the First Schedule allow life insurance businesses to compute profits and gains. However, some companies have been claiming non-business expenses without a provision to add these back to income. To prevent this, the amendment will ensure that any inadmissible expenses under Section 37 are added back to the profits and gains. This change will take effect from April 1, 2025, applying from the assessment year 2025-26 onwards.