The Central Board of Direct Taxes (CBDT) has issued Notification No. 135/2025 amending the Income-tax Rules, 1962, to provide specific clarifications for units operating as International Financial Services Centre (IFSC) Insurance Offices engaged in the insurance business.
The changes have been made through the Income-tax (Twenty-Third Amendment) Rules, 2025, which came into effect on the date of their publication in the Official Gazette.
Key Amendments in Form 10CCF
The notification modifies Form No. 10CCF (Annexure A) under the Income-tax Rules, which relates to the reporting of eligible income for deduction under Section 80LA of the Income-tax Act, 1961.
Definition of Gross Income for IFSC Insurance Offices
Under Serial No. 6 of Form 10CCF, a clarification has been inserted stating that for IFSC Insurance Offices undertaking insurance business, “gross income” will mean profits and gains calculated as per Section 44 and the First Schedule of the Income-tax Act, 1961.
Declaration of Gross Eligible Income
Under Serial No. 9, it has been specified that in the case of IFSC Insurance Offices where profits and gains are computed as per Section 44 and the First Schedule, the field for “gross eligible income” may be submitted as Nil.
Legal Backing
The amendment has been made using the powers under Section 80LA(3)(i) read with Section 295 of the Income-tax Act, 1961. Section 80LA provides tax incentives to units set up in IFSCs, including banks, financial institutions, and insurance offices, with the objective of promoting India as a global financial hub.
Background
The principal Income-tax Rules, 1962, were first notified on 26th March 1962 and have since undergone several amendments. The latest amendment comes shortly after the August 18, 2025 (G.S.R. 555(E)) modification.
Impact
The move provides greater clarity for insurance companies operating in IFSCs on how to compute and report their eligible income for tax deduction purposes. By aligning the computation of profits with Section 44 (special provisions for insurance business) and the First Schedule, the notification removes ambiguity and ensures consistency in tax compliance for such entities.
Notification Details
Notification No. : 135/2025
Date: 20th August, 2025
